EU wheat slips further with Chicago

PARIS, Dec 17 (Reuters) - European wheat futures fell to new contract lows on Wednesday, tracking a further slide in Chicago as chart-based selling and the cancellation of some U.S. wheat sales to China maintained bearish sentiment, traders said.

March wheat BL2H6, the most active contract on Paris-based Euronext, settled 0.3% down at 185.25 euros a metric ton, a contract low.

It earlier set a latest contract low at 185.00 euros, below Tuesday's 185.50 euros.

Chicago wheat Wv1 also set fresh contract lows. GRA/

News that sales of 132,000 tons of U.S. wheat to China had been cancelled, following market rumours on Tuesday, kept the focus on stiff competition with a record Argentine crop set to further swell global supply.

"You've got Argentina and feed wheat supply that are weighing," a futures trader said. "But when you compare it with corn, Chicago wheat shouldn't fall much more really."

Wheat markets have also been pressured by rising expectations of an agreement to end Russia's war in Ukraine, though traders remained cautious about the likelihood of a ceasefire.

Euronext prices had steadied earlier in the session, helped by an easing in the euro EUR= from Tuesday's near three-month high against the dollar.

“Recent Euronext weakness has brought the west EU back into export competitiveness against the Black Sea, especially Russia, but not against Argentina,” one German trader said.

“There is also welcome euro weakness today which could add up to new export business, so there is some export optimism.”

French wheat for January shipment is currently around $224-$226 a ton free on board (fob), below $226-$228 a ton for Russian 11.5% protein wheat, with Ukrainian and Romanian both around $4-$5 over French, the trader said.

But new-crop Argentine 11.5% protein crop is still the world’s cheapest high-volume origin at about $208-$215 a ton fob for January/February shipment.

In Germany, wheat export loadings this week included two shipments of around 30,000 tons each for Algeria and one of around 30,000 tons for Morocco.

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