Euronext wheat slips to five-week low as euro strength weighs

PARIS/HAMBURG, Jan 27 (Reuters) - Euronext wheat fell on Tuesday to a five-week low as a further jump in the euro against the dollar added to export headwinds for European wheat in a well-supplied global market, traders said.

March milling wheat BL2H6 on Euronext settled 0.9% down at 187.25 euros ($224.03) a metric ton, after hitting its lowest since December 22 at 187.00 euros in late trade.

The euro EUR= climbed to its highest since June 2021 versus the dollar, as the U.S. currency continued facing pressure from factors including uncertainty generated by U.S. President Donald Trump's policy agenda. FRX/

A stronger euro makes western European grain more expensive for export, and the currency trend comes as the EU faces competition from Argentina in Morocco, its main export market.

"With the exchange rate, Chicago prices look more attractive export-wise than Matif (Euronext)," a futures trader said, adding that the market remained in a range seen since December with investors already holding large short positions.

Chicago wheat Wv1 was little changed, with the dollar's weakness helping prices steady after easing worries about winter storm damage pushed prices down from a six-week high on Monday.

The U.S. market was also watching to see if Trump would make farming announcements during a trip on Tuesday to Iowa, a major crop and biofuel-producing state.

News of an import tender to be held by Tunisia on Wednesday raised the prospect of more demand after Saudi and Algerian purchases last week.

But Argentine competition hung over the European market.

Argentine 11.5% protein wheat for February shipment was on Tuesday around $218-$221 a ton free on board (FOB), with quotes as low as $215 a ton seen for January shipment.

Russian and Ukrainian 11.5% protein wheat were around $223-$227, with French and Romanian wheat each about $9 over Russian/Ukrainian.

“Despite heavy sales of new crop Argentine wheat, there is still no real indication that Argentine prices are rising for shipments later this spring,” a German trader said.

“Argentine FOB quotations for May shipment are only about $4 above February.”

Traders also noted purchase interest from Spain for handy-sized shipments of Ukrainian feed wheat at $243-$244 a ton cost and freight included (c&f) for February/March shipment to Spanish Mediterranean ports.

($1 = 0.8358 euros)