EU wheat falls as fears of winter weather damage to US and Russian crops fade

PARIS/HAMBURG, Jan 26 (Reuters) - Euronext wheat fell on Monday as concerns over cold damage to U.S. and Russian crops subsided while a stronger euro added to export challenges for western Europe.

March milling wheat BL2H6, the most active position on Euronext's Paris-based futures, closed down 1.1% at 188.75 euros ($224.39) a metric ton.

Euronext tracked a pullback in Chicago wheat Wv1, which gave back part of its sharp gains from Friday. GRA/ While the arrival of extreme cold in the United States sparked a rally before the weekend, traders on Monday took the view that cover would limit crop losses in the U.S. Plains.

"There doesn't look like being much winter-kill so prices are coming off. If there had been a serious threat the market would probably have had another leg-up today," a futures dealer said.

Extensive snow cover in Russia was also tempering concerns about significant damage to fields from intense cold in the world's biggest wheat-exporting country.

A rise in the euro EUR= against the dollar also weighed on Euronext by making western European grain more expensive for export.

European wheat is facing competition from Argentina in Morocco, its main export market, and abundant rainfall in the North African country is also raising the prospect it will harvest a bigger crop this year and cut back on imports. EU farmers are reluctant to sell at low prices, keeping cash market premiums firm.

“Cheap Argentine wheat is still winning demand and Argentina’s January exports are expected to reach record-high tonnages,” one German trader said. “Argentine wheat continues to be offered heavily in North African markets like Algeria and Morocco, which are important EU markets.”

“Morocco is still seeking offers for February/March shipment positions, with French and Argentine origins competing hard to win Moroccan sales.”

($1 = 0.8412 euros)