EU wheat pauses as focus shifts to Algerian tender

PARIS/HAMBURG, Dec 3 (Reuters) - European wheat was little changed on Wednesday as worries over war escalation in the Black Sea subsided and traders assessed initial results from an Algerian import tender.

March wheat BL2H6, the most active contract on Paris-based Euronext, was unchanged on the day at 191.00 euros ($222.71) a metric ton by 1716 GMT.

The contract had climbed more than 1% in the previous session as a threat by Moscow to cut off Ukraine's sea access in response to drone attacks on Russia-linked ships rekindled concerns about war risks to massive Black Sea grain trade.

"We're really faced with oversupply, so even if one vessel gets hit there's still going to be supply coming from elsewhere," a futures trader said.

Bumper crops being harvested in Argentina and Australia are set to further swell global supply and intensify export competition.

New-crop Argentine wheat and Black Sea origins were expected to be in contention to cover a purchase by Algeria, which traders said bought wheat at around $256 per ton cost and freight (c&f) included, on Wednesday, with French supplies thought to be overlooked due to diplomatic tensions between France and Algeria.

However, talk that Argentina's hefty crop was showing lower quality, notably in protein content, was helping underpin European prices.

“Argentine quality issues are somewhat tempering the impact of very large volumes expected from Argentina’s new crop,” a German trader said.

“There is talk about the first difficulties with poor Argentine new crop quality in export shipments, which may make the trade cautious in making aggressive sales until there is a clearer quality picture.”

Financial investors extended their net short position in Euronext wheat last week, data published by the exchange on Wednesday showed.

($1 = 0.8576 euros)