EU wheat bounces off 6-month low with tariffs, exports in focus

PARIS, March 12 (Reuters) - Euronext wheat ended higher on Wednesday, recovering from an earlier six-month low in choppy trading as the market assessed latest tariff measures and results from an Algerian import tender.

May wheat BL2K5 settled 0.9% up at 223.25 euros ($243.36) a metric ton.

It earlier fell to 217.75 euros, its weakest since late August and below a previous six-month low from Friday.

The market has been pressured in the past week by a rally in the euro EUR= against the dollar, though an easing in the euro from a four-month high gave some respite to Euronext wheat on Wednesday.

A large short position held by investment funds has left Euronext prone to short-covering moves, traders said.

Financial investors expanded sharply their net short position in Euronext wheat last week, data published by Euronext on Wednesday showed.

Traders noted that the net short position of the investment fund category had jumped to a record net short of nearly 207,000 contracts.

Chicago grains extended losses as U.S. tariffs and European Union counter-measures fuelled concerns about trade disruption. GRA/

The EU's proposed response could see the bloc put tariffs on U.S. corn and soybeans, a scenario that would hurt the import-reliant livestock feed sector, EU industry group FEFAC said.

Major importer Algeria bought at least 450,000 metric tons of milling wheat in a tender on Wednesday, traders said in initial assessments.

Ukrainian, Bulgarian and Romanian wheat were seen as most likely to be chosen by sellers to fill the order, with French supplies not in contention due to continuing diplomatic tensions between Algiers and Paris, traders said.

Farm office FranceAgriMer on Wednesday cut its forecast of French soft wheat exports outside the EU this season to a new low this century of 3.2 million tons, with a slow pace of shipments confirming the impact of a poor harvest.

In Germany, farmers were reluctant sellers due to low prices, making it hard for exporters to obtain supplies and benefit from demand from Morocco, traders said.

Reduced farmer selling has also supported German inland prices, generating a transfer of supplies in export ports back to the domestic market, one German trader said.

($1 = 0.9173 euros)