EU wheat hovers near lows with Algerian import tender in focus

PARIS, Sept 23 (Reuters) - Euronext wheat hovered around contract lows on Tuesday as Argentina's suspension of grain export taxes reinforced expectations of abundant supply from exporting countries, while traders awaited results from an Algerian import tender.

December wheat BL2Z5 on Euronext's Paris-based futures market was unchanged on the day at 189.00 euros ($223.04) per metric ton at 1304 GMT. It earlier set a contract low of 187.75 euros, just under a previous low of 188.00 euros from early September.

Chicago wheat Wv1 steadied in overnight trading after setting latest contract lows.

"The narrative about weak global wheat demand puts pressure on prices. Importers are buying slowly, eyeing the good crop in the southern hemisphere," Andrey Sizov, head of consultancy Sovecon, said.

Monday's announcement that Argentina will suspend export taxes on all grains for over a month to boost dollar earnings added to negative sentiment, suggesting the South American country could step up exports in the coming weeks.

However, a rally in the Argentine peso, as the U.S. government promised financial support to its ally, may partly offset the competitive advantage from the export duty waiver.

“But it has to be regarded as bearish as no doubt more Argentine wheat will be offered internationally, although initial exporter attention will probably be on soy,” a German trader said.

The Algerian tender being held on Tuesday promised to bring some welcome demand. The shipment periods sought were seen as too early to allow offers of Argentine new-crop wheat.

Black Sea origins were seen as best placed, given their recent price advantage over west European wheat, and with a tacit exclusion of French wheat, amid a long-running diplomatic row between Paris and Algiers, expected to continue.

Traders said Ukrainian 11.5% protein wheat was currently the cheapest for the November shipment periods sought by Algeria at about $220-$223 a ton FOB, followed by Russian and Romanian at around $227-$230, with French wheat $2-$4 more expensive than Russian, depending on Euronext and currency moves.

($1 = 0.8474 euros)