EU wheat trims gains after previous session rally

PARIS, Oct 28 (Reuters) - European wheat edged lower on Tuesday, paring some of the gains recorded the previous day, as attention returned to hefty global wheat supplies and incoming harvests in Argentina and Australia.

Benchmark December milling wheat BL2Z5 on Paris-based Euronext closed 0.5% lower at 192.50 euros a metric ton, after hitting a nearly two-month high of 193.50 euros on Monday.

The most traded wheat contract in Chicago Wv1 was down 0.2% by the same time at $5.24-3/4 a bushel.

"Euronext had gained more than 2% in just one week. There is no justification for such a rise when you look at global supplies, especially with bumper crops expected in the Southern Hemisphere," a French trader said.

EU wheat prices had followed a rally on U.S. grains markets on Monday due to hopes for a U.S.-China trade deal.

"But wheat would probably not directly benefit from any deal," one German trader stressed.

Overall, western EU wheat is still looking competitive in the main North African and Middle Eastern markets, which is limiting price falls, traders said.

French, Russian, Romanian and Ukrainian 11.5% protein wheat prices were all quoted in a similar small range of $227-$230 a ton FOB for November/December shipment, although with Russian just cheapest at the bottom end of the range depending on Euronext and currency moves.

But the EU faced strong competition from new crop Argentine 11.5% wheat, the world's cheapest at $210-$212 a ton FOB despite recent strengthening of the Argentine peso.

Export demand remained weak, with no international wheat purchase tenders issued in recent days and Jordan making no purchase in a wheat tender on Tuesday. GRA/TEND

But traders noted buying interest from Algeria for 60,000 tons of Ukrainian wheat in two 30,000-ton consignments for second half November shipment at about $255 and $256 a ton cost and freight included (c&f).