PARIS, March 17 (Reuters) - European wheat futures edged lower on Friday as this week's rally in the euro against the dollar continued to dampen sentiment but price movements were limited in thin end-of-week trading.
May milling wheat, the most active contract on Paris-based Euronext, settled down 0.50 euro, or 0.3 percent, at 172.00 euros a tonne, holding in its recent chart range.
The euro's strength, which makes grain from countries such as France and Germany more expensive on dollar-priced export markets, has tempered export hopes after a recent run of international tenders.
"The euro trading above $1.07 is weighing on the overall trend, although this hasn't been enough to break chart support in lacklustre end-of-week activity," one futures dealer said.
The euro hit a new five-week high against the dollar on Friday after an opinion poll showed anti-EU politician Marine Le Pen extending her lead in the first round of France's presidential elections.
The euro's run-up took the shine off large tender purchases this week by Egypt and Algeria.
"The euro seems to be holding around $1.07 which is not positive for exports after we started March around $1.05," a German trader said.
On the German market, standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at an unchanged premium of 3 euros over the Paris May contract. Buyers were seeking 2.5 euros over.
Comments by Turkish officials rejecting reports that Turkey had excluded Russian wheat from a tariff-free import scheme also eased concern about potential disruption to trade flows.
European prices were also being capped by favourable prospects for this year's harvest.
In France, 92 percent of soft wheat crops were rated good or excellent in the week to March 13, unchanged from the previous week, farm office FranceAgriMer said on Friday.
Crop conditions were also favourable in Germany.
"Overall, crops are looking good and warm weather is forecast for next week following a warm March so far. So the likelihood is rising that German wheat will come through the winter without major frost damage, setting the stage for a good harvest this summer," the German trader said.
Export sentiment was more upbeat in the barley market, where European Union origins were seen well placed to claim some of the 1.5 million tonnes being sought by Saudi Arabia in a tender that closed on Friday.
(Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; editing by David Clarke) ((firstname.lastname@example.org; +33 1 49 49 52 18; Reuters Messaging: email@example.com))