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.

The market showed little immediate reaction to the U.S. Department of Agriculture's monthly supply-demand report, which raised the USDA's outlook for global wheat supply following recent increases to harvest estimates in major exporting countries like Australia, Argentina and Canada.

March wheat BL2H6, the most-active contract on Paris-based Euronext, settled 0.3% down at 190.25 euros ($221.20) per metric ton.

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

Weekly European Union data showed soft wheat exports so far in 2025/26 were down 3% from a year ago at 10.16 million tons, though figures for some countries including France and Bulgaria remain incomplete.

Grain trade association Coceral forecast a smaller EU soft wheat crop in 2026 after this year's high level, despite favourable early growth for the next crop.

($1 = 0.8601 euros)