EU wheat falls as slow exports hang over market

Adds closing price, estimates of Algeria tender result and market positions data

PARIS, Feb 12 (Reuters) - Euronext wheat prices slipped on Wednesday as a reduced French exports forecast and initial results reported from an Algerian tender put the focus on weak demand for Western European supplies.

The European market faced further pressure at the end of the session as the euro EUR= rebounded against the dollar while U.S. wheat Wv1 turned lower in choppy trading in Chicago. GRA/

March wheat BL2H5 on Paris-based Euronext settled 1.7% down at 232 euros ($241.42) a metric ton.

The front-month contract was moving away from Tuesday's peak of 238.75 euros, its highest since January 3.

After Euronext was buoyed this month by signs of ebbing Russian competition, there was renewed focus on low French exports.

Farm office FranceAgriMer cut its forecast for French soft wheat shipments outside the European Union in 2024/25 to a new low this century.

Slow exports were maintaining large inventories in France despite the smallest harvest since the 1980s last summer.

"We're looking at big wheat stocks," one futures dealer said. "Exporters are not seeing enough demand for now."

March futures fell more sharply than deferred positions amid concerns that port silos were relatively full, dealers added.

Negative export sentiment was reinforced by early assessments of an Algerian tender, in which the major importer was expected to be supplied from the Black Sea region, though Russian wheat was not considered a likely origin.

“The Algerian tender provides welcome new demand in the market, but it looks like the western EU will have a tough time supplying any purchase, with Russian and other Black Sea prices still looking cheap,” one German trader said.

Traders initially estimated that Algeria’s state grains agency OAIC had bought about 550,000 to 600,000 tons of optional-origin milling wheat at $262 to $263 a ton cost and freight (c&f).

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

($1 = 0.9610 euros)