Egypt came to the aid of Paris wheat after a cocktail of a stronger euro, weak French grain data, and a cloud over Algerian imports threatened to send prices lower once again.

The price of Paris's March lot dipped in early deals to E115.25 a tonne, matching Monday's three-year low, as FranceAgriMer, the French farm office, raised its estimate for the country's wheat stocks by 71,000 tonnes to 3.99m tonnes.

The increase for inventories as of the end of 2009-10 in Europe's biggest wheat producer reflected a decline in hopes for domestic feed demand, and of exports within the region.

And Remi Haquin, the president of FranceAgriMer's grains committee, signalled weak prospects for prices to come, with the outlook for this year's harvest appearing "good to excellent".

"In terms of farmers' revenues, the situation looks like being difficult again in 2010," he said.

Durum trade halted 

Separately, Algeria, France's main wheat export market, said its 2010 harvest was looking in even better shape than last year's, which enabled a 12% drop to 5.69m tonnes in imports.

Furthermore, the euro rebounded after George Papandreou, the prime minister of debt-troubled Greece, said that the European Union would be prepared to intervene if the country's borrowing costs are pushed higher by speculators.

'Cheered things up' 

However, March wheat closed up E0.50 at E116.25 a tonne In Paris after France split with Russia victory in the latest tender from Egypt, the world's biggest wheat importer.

"That cheered things up a bit, but only a bit," a London trader told Agrimoney.com.

Jonathan Lane, trading manager at UK grain merchant Gleadell, pointed to the bid of $164.55 a tonne, from merchant Alex Grain, with which France won half of Egypt's 120,000-tonne order.

"That's a low price," Mr Lane said. Egypt three months ago paid $193.70 a tonne for French wheat.

Danish threat

Even then, Paris wheat might have further to fall, with intervention offering at best E104.53 a tonne, silos to empty before what looked like proving a bumper harvest, and prices of supplies from other countries yet cheaper.

"French wheat it not competitive against Black Sea business," Mr Lane said. "And it is about £16.50 a tonne more expensive than London wheat."

Furthermore, Denmark is believed to be selling increasingly aggressively on wheat markets, with some 500,000 tonnes to sell before the next harvest, he added.