EU wheat eases as Argentine export tax cut weighs

PARIS, Dec 9 (Reuters) - European wheat futures edged lower on Tuesday as Argentina's announcement of a cut to its grain export taxes was set to maintain stiff competition in a heavily supplied wheat market.

Price movements and trading volumes were moderate, with grain markets awaiting the U.S. Department of Agriculture's monthly supply-demand report later in the day.

March wheat BL2H6, the most-active contract on Paris-based Euronext, was down 0.1% at 190.50 euros ($221.49) per metric ton at 1501 GMT.

Chicago wheat Wv1 turned slightly higher after falling earlier following the news from Argentina, in hesitant trading before the USDA's December world report. GRA/

After rising on Monday when an easing in the euro boosted export sentiment in western Europe, Euronext fell following Argentina's announcement, which covered export duties on major crops including wheat.

"The decision by Argentina's government to cut export taxes on wheat is bearish for the EU at a time when Argentine wheat is anyway the cheapest in the world," one German trader said.

"This could increase Argentine competition in important EU wheat markets like Morocco and Algeria."

The reduced export duty, expected to be implemented in the coming days, could also bolster Argentine feed wheat exports, with some of the country's large crop thought to have suffered quality damage from heavy rain, traders said.

Argentine 11.5% is estimated to be the world's cheapest high-volume origin wheat at $207-$209 a ton free on board (fob) for January shipment.

Russian 11.5% wheat was around $224-$226 a ton fob. French, Romanian and Ukrainian wheat were in a similar range just above Russian at $227-$230 a ton FOB.

($1 = 0.8601 euros)