The European wheat futures were lower in Paris on Tuesday due to the public holidays that took place in France and in the United States. Chicago's weaker U.S. market also impacted sentiment.

The tough price competition west EU wheat faces in export markets to the Black Sea Region and South America is also a factor, as market participants are absent from a Geneva grains conference.

At 1500 GMT, December wheat prices on Paris' Euronext exchange were down 0.5% to 189.75 Euros ($221.29) per metric tonne. The front-month contract is set to fall for the fifth consecutive day, after a two-month high last week.

Chicago wheat dropped 0.2% early on Tuesday, despite U.S. market being open despite Veterans Day holiday. The euro's strength against the dollar, which is a depressant for exports, also weighed on prices.

Donatas Jankauskas, CM Navigator analyst, said: "With holidays both in the U.S.A. and France, and limited newsflow, Euronext drifted down on thin volume while Chicago wheat’s recent strength faded, in what looks so far like a Turnaround Wednesday."

Investor positioning is also a concern.

Jankauskas stated that funds still need to close or roll over short positions from the Euronext contract in December to March by the middle of the month. This is evident in the shrinking spread between the two months.

New crop Argentine 11,5% wheat was viewed as the world's cheapest origin for high volume at $209-211 a tonne FOB, and created strong competition with EU wheat on important markets such as Morocco.

The traders reported that the price of Russian, Ukrainian, and Romanian 11,5% protein wheat was about the same, at $225-227 per ton FOB, for shipment in November/December. French was $2 more than Russian.

A German trader stated that "Jordan purchased 60,000 tons of wheat today, and Egypt bought 500,000," both from the Black Sea. ($1 = 0.8575 euro) (Reporting and editing by Ed Osmond; Michael Hogan)

(source: Reuters)