EU wheat holds near low as firm euro keeps focus on export tussle

PARIS/HAMBURG, Nov 26 (Reuters) - Benchmark wheat prices on Euronext held on Wednesday around a contract low as a further rise in the euro kept the focus on export competition amid abundant global supply.

Chart support on Euronext and a strength in Chicago grains, as investors covered positions before Thursday's U.S. Thanksgiving holiday, lent some support to the European market, traders said. GRA/

March wheat BL2H6, the most active contract on Paris-based Euronext, was unchanged on the day at 190.25 euros ($220.54) a metric ton by 1713 GMT. It held just above a contract low of 189.75 euros that it had equalled in each of the two previous sessions.

The euro EUR= rose for a third session against the dollar, as investors continued to anticipate a U.S. interest rate cut next month,. A stronger euro makes western European grain more expensive in dollar-priced export markets.

EU wheat is facing competition from traditional rivals like Russia in the Black Sea zone, as well as from big crops being harvested in Argentina and Australia.

"Falls in Euronext earlier this week have brought EU wheat back into contention for export sales against the Black Sea, which is encouraging,” one German trader said. “But new crop Argentine wheat is still the world’s cheapest by far.”

Russian 11.5% protein wheat for December/January shipment was still holding a price lead at about $223-$225 a ton free on board (fob). French and Romanian wheat were both about the same level, about $2 a ton over Russian.

Ukrainian was about $2 over French and Romanian and $4 over Russian.

But Argentine 11.5% was holding a firm price lead at about $208-$210 a ton fob, creating tough competition for EU supplies in African markets.

In a sign of large Russian export supplies, traders said on Wednesday that a state buyer in Turkey had bought about 300,000 tons of Russian milling wheat in a direct deal without issuing an international tender.

Traders were monitoring a sharp fall in maize exports from Ukraine due to a rain-delayed harvest and Russian strikes on railway infrastructure, though ample harvest supply in the United States was expected to cap prices and help keep importers in Europe covered.

March maize EMAH6 was up 0.7% at 189.50 euros a ton.

Financial investors extended their net short position in Euronext wheat last week, data published by the exchange on Wednesday showed.

($1 = 0.8627 euros)