Euronext wheat slips under pressure from export competition

PARIS, Jan 14 (Reuters) - Euronext wheat futures fell on Wednesday as a firmer euro and a reduced forecast for French shipments underscored stiff export competition, traders said.

March milling wheat BL2H6, the most active position on Euronext's Paris-based futures, lost 0.7% to 189 euros ($220.34) a metric ton by 1623 GMT to move back towards the contract low of 185 euros struck in December.

Chicago wheat Wv1 eased for a third session as Monday's higher than expected grain supply estimates from the U.S. Department of Agriculture hung over the market. GRA/

The euro EUR= regained ground against the dollar, making western European grain more expensive overseas. FRX/

In France, farm office FranceAgriMer on Wednesday cut its monthly forecast for French soft wheat exports outside the European Union in 2025/26 to 7.5 million tons from 7.6 million tons, citing competition from Argentina in Morocco, the main non-EU market for French wheat.

"They have observed the pressure in the Moroccan market but it has not been sufficiently taken into account," one futures dealer said of FranceAgriMer's figures.

An expected record Argentine crop is adding to abundant supplies in major exporting countries and offsetting concerns about winter weather in Europe and intense Russian attacks on Ukrainian Black Sea ports.

“Moroccan mills are asking for quotes for French and other west EU wheat along with Argentine, but Argentine wheat looks set to win any new sales," one German trader said.

Argentine 11.5% protein wheat for February shipment held its position as the world's cheapest high-volume origin, falling on Wednesday by about $3 to $5 a ton to around $215 to $220 a ton, about $12-$15 a ton cheaper than French supplies, the trader said.

Despite reports of lower quality owing to high harvest yields, cheap Argentine wheat could be used to supply recent sales to Algeria as well as Morocco, traders said.

In Germany, 12.5% protein wheat traded at a premium of 11 euros over Euronext March in Hamburg on Wednesday.

“This would translate to about $240 FOB Hamburg, which for me is too expensive for serious hopes of winning new export sales,” the trader said, referring to the free on board price.

In rapeseed, February futures COMG6 on Euronext were down 0.7% at 470.00 euros a ton, retreating from a one-month high on Tuesday as traders monitored Canadian-Chinese talks to defuse tensions that have affected rapeseed trade.

($1 = 0.8578 euros)