EU wheat lower as euro and Chicago weigh

PARIS, Feb 25 (Reuters) - Euronext wheat eased on Wednesday, moving back from a three-month peak under pressure from weakness in Chicago futures and a rise in the euro, traders said.

May milling wheat BL2K6, the most-active position on Euronext, was down 0.1% at 197.00 euros ($232.70) a metric ton by 1724 GMT.

The contract had touched a three-month peak of 199.50 euros on Friday and again on Tuesday but faced chart resistance near the 200-euro mark.

Chicago wheat Wv1 fell further from an eight-month high hit on Monday. GRA/

Wheat markets had rallied last week as adverse weather and investor worries over U.S.-Iran tensions sparked short-covering.

The euro's EUR= rise against the dollar on Wednesday underscored export challenges for western European wheat after Black Sea supplies were expected to cover an import purchase by Algeria.

"Euronext wheat close to the 200 euro level is bad news for export competitiveness in markets where the EU is still in with a chance to make sales against Black Sea competition like Egypt and Morocco," one German trader said.

"It looks like purchases in Algeria's tender will be supplied from the Black Sea, especially Ukraine, Romania and Bulgaria."

Algeria's state grains agency OAIC is believed to have purchased about 600,000 metric tons of milling wheat in a tender which closed on Tuesday, though further negotiations on Wednesday were thought to have stalled over price, traders said.

French wheat was believed to have been excluded like in other Algerian tenders in the past year due to diplomatic tensions.

In Egypt, another major import market, Russian 11.5% wheat was seen as cheapest at around $249 a ton cost and freight included (c&f) for March shipment. Ukrainian and Romanian were close together around $250 to $251 but French was about $254 depending on Euronext and euro moves.

In Morocco, the European Union's main export market, two buyers were both said to be seeking about 30,000 tons of wheat for February/March shipment at around $250 a ton c&f.

Drier weather in France after torrential rain last week has tempered concerns about crop conditions.

But deferred positions on Euronext for the 2026 harvest held steady again, with traders citing a lack of farmer selling due to uncertainty over rain damage.

Financial investors reduced sharply their net short position in Euronext wheat last week, data published by the exchange showed.

($1 = 0.8466 euros)