Prices in west European wheat markets edged higher on Friday, supported by export deals this week which helped ease concerns about oversupply, traders said.

Front month May on Euronext milling wheat futures was 0.25 euros higher at 125.75 euros a tonne, shrugging the fall on U.S. markets that comes on the back of increased competition on their traditional export markets.

In Chicago, soft red winter May wheat futures fell to a new contract low of $4.64 a bushel on pressure from plentiful global stocks, traders said.

But traders continued to bet on the weakness of the euro against the dollar -- and thus further demand for EU products -- despite the deal reached by euro-zone leaders on a safety-net for Greece as uncertainties remained over the country's debt sustainibility.

"The European crisis is not over yet," a trader said.

Other traders cited concerns about low internal EU demand, which means the final ending stocks could not benefit from the recent pickup in exports on world markets.

New signs emerged this week that Latin American countries were increasingly turning to EU origins for their supplies because of a lack of competitiveness of U.S. wheat and traders mentioned volumes up to 200,000 tonnes sold in recent weeks.

Traders said this week that west European Union wheat plantings have emerged without major damage from the Arctic-style temperatures seen this winter and hopes of a good harvest are increasing.

Feed wheat futures in London were higher, boosted partly by the weakness of sterling against the euro which improved the competitiveness of British exports to its key customers.

Dealers said slow farmer selling also buoyed prices.

May feed wheat rose 1.25 pounds or 1.3 percent to 97.25 pounds a tonne.

"The small price rise we have seen has been principally driven by lack of farm selling and continuing demand to load spot vessels," merchant Frontier Agriculture said in a weekly report issued on Friday.

"Exports, although not spectacular in their volume, do continue to take place and at current pace we should see this year's surplus clear by the time new crop arrives," the report added.

Wheat in Spain and the Benelux region was also firm after the recent export deals by EU producers eased fears of oversupply.

Dealers said the Spanish domestic market had yet to react to the euro's strength following an aid deal for Greece.

Spain has no centralised continuous grain exchange, so movements on international markets tend to have a delayed impact on local cash prices.

Prompt feed wheat unchanged from Thursday and quoted at 138-139 euros a tonne, ex-store, in key grain port Tarragona. That is about 5-6 euros more than two weeks ago.

"News that France is exporting to Latin America, and Britain to the Philippines has added tension to the market," a dealer said.

In the Netherlands, sellers were offering April/May feed wheat at 124 euros a tonne cif Dutch ports, while September/December was offered at 128 euros a tonne, up about 2 euros on the week.

"It's been a bit higher, but with relatively few trades," one broker in the Netherlands said. "Prices moved up a bit partly because of export stories, with exports picking up from some destinations which were unforeseen."



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