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EU wheat slips ahead of USDA data, exports in focus

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PARIS, Jan 12 (Reuters) - Euronext wheat futures fell on Wednesday after a three-day rise as traders adjusted positions before widely-followed U.S. government crop data while also assessing mixed signs for European exports.

March milling wheat, the most active contract on Paris-based Euronext, was down 3.50 euros, or 1.3%, at 273.25 euros ($311.86) a tonne by 1536 GMT.

The contract had recovered from a 2-1/2 month low on Friday, before easing back on Wednesday in step with Chicago.

Volumes were moderate as grain markets awaited U.S. Department of Agriculture (USDA) supply and demand, stocks and sowing reports later on Wednesday.

FranceAgriMer cut its forecast of French wheat exports in 2021/22, partly due to a drying up of sales to Algeria, and the farming agency also increased its wheat stocks projection to a 17-year high.

Together with a sharp rise in the euro, FranceAgriMer's supply and demand update tempered export hopes generated by sales to Morocco and a series of tenders issued by importers.

"Exports are at a bit of a crossroads," one French trader said.

European traders are watching to see if Algeria will again overlook French supplies in a tender on Thursday.

Demand from Morocco was lending some support to the French market. Traders cited talk of sizeable sales of several hundred thousand tonnes since last week for nearby delivery.

In Germany, tenders issued by Algeria, Iran and Turkey sparked hopes of new export activity.

“Demand in German internal markets for milling and feed wheat is stronger than in export ports,” a German trader said. “But German wheat has a chance in the new tenders from Algeria, Iran and Turkey with Russian export taxes so high."

Traders said they also believed some of the purchase of 240,000 tonnes made by Iran last week could be sourced in Germany.

Standard 12% protein wheat for January onwards delivery in Hamburg was offered for sale at around 12 euros over Euronext March, but with purchase interest slack.

However, a run of exports by Brazil was creating competition for German wheat in Saudi Arabia, the trader added. ($1 = 0.8762 euros) (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Alexander Smith)

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