EU wheat hits two-month high as euro and weather weigh

PARIS, Jan 30 (Reuters) - Benchmark wheat prices on Euronext rose to a two-month high on Friday as the euro fell against a rebounding dollar, while intense cold forecast in Ukraine raised concern about crop losses, dealers and analysts said.

March milling wheat BL2H6, the most-active position on Euronext's Paris-based futures market, settled 1.6% up at 194.25 euros ($230.61) a metric ton. It rose earlier to 194.50 euros, its highest since November 20, as it recovered further from a five-week low of 187 euros on Tuesday.

March again led gains on Euronext, with investors covering short positions in the front-month and shifting more deferred-delivery contracts.

"You've got a bit of worry about cold weather risks in Ukraine," Maxence Devillers, analyst with Argus Media, said. "There is some short-covering (in March futures) as people prepare for the expiry of options."

The euro's late-in-the-week fall against the dollar by itself could make European grain cheaper for export.

But that advantage was offset by Euronext's rise and the euro's broader gains over the past two weeks, making the export outlook uncertain, Devillers said.

The dollar was continuing to recover from Tuesday's four-year low against other major currencies including the euro. FRX/

After extreme cold in the U.S. Plains in the past week, traders were monitoring deep frosts forecast in Ukraine in the coming days, which could damage winter crops including wheat in the major grain-exporting country.

European prices remained capped by strong competition in a well-supplied global wheat market, with Argentina threatening to erode European exports in North Africa.

The European Commission on Thursday cut its monthly estimate of European Union soft wheat exports in 2025/26 by nearly 5% to 29.5 million tons, joining other forecasters in reducing export expectations for the EU.

However, shipments from France remained steady. A vessel loading around 60,000 tons in Dunkirk for Egypt was expected to be followed by another ship next week due to take a similar volume for Egypt, traders said.

($1 = 0.8423 euros)