EU wheat holds steady on weather and Ukraine war risks

PARIS/HAMBURG, Jan 8 (Reuters) - Euronext wheat futures ended flat on Thursday after hitting a new six-week high, as traders weighed weather and Ukraine war risks to supply against abundant short-term availability of wheat.

Participants were also assessing annual changes in commodity index fund positions and making adjustments before a raft of U.S. government crop data on Monday, traders said.

March milling wheat BL2H6, the most-active position on Euronext's Paris-based futures, settled unchanged on the day at 191.50 euros ($223.06) a metric ton.

The contract earlier rose to its highest since November 21 at 192.00 euros, slightly above a previous six-week peak on Wednesday.

Chicago wheat Wv1 rose for a second session. GRA/

"Prices are finding some support from geopolitical risks as well as some weather issues ... but overall the scale of the world’s wheat output this season continues to weigh on prices," British merchant Frontier Agriculture said in a note.

Intense Russian attacks on Ukraine, meanwhile, have revived worries about disruption to the Black Sea grain trade.

A decline in condition ratings for winter wheat in some U.S. states has put attention on dryness there. Traders were also monitoring severe cold in central Europe that is also forecast to reach Ukraine and Russia in the coming days.

But snow cover was expected to limit potential damage to dormant crops, including in Germany.

“Although deep frosts are forecast this week there is a lot of snow nationally which is likely to provide good protection for grain crops,” a German trader said.

Cheaper competition from what is expected to be a record crop in Argentina continued to cloud export prospects in western Europe amid tepid new year demand.

Argentine 11.5% protein wheat for February shipment was on Thursday around $219-222 a ton free on board (FOB).

Russian was around $223-$226 a ton FOB and Ukrainian around $228-$230. French and Romanian were around $7-$8 above Russian prices depending on exchange rate and Euronext moves.

“This does not bode well for (EU) sales to Morocco, which still has several months of imports before its new crop arrives, and has been an important outlet for west EU wheat this season especially France,” another German trader said.

($1 = 0.8585 euros)