UPDATE 1-European wheat falls as weather concerns recede

(Adds quotes, Italy; updates prices)
MADRID, Feb 2 (Reuters) - European benchmark wheat prices retreated on
Thursday from a seven-month high the day before, in step with a similar slide in
Chicago, as dealers said the rally this week, on fears that cold weather would
damage crops, had been overdone.
* By GMT front-month March milling wheat was off 0.35 percent to
216.00 euros a tonne on the Euronext exchange in Paris, having dipped as low as
212.75 euros in earlier dealing.
* New crop November was 0.63 percent lower at 197.00 euros a tonne.
* Bitterly cold weather currently engulfing much of Europe is raising
concerns over damage to European Union grain plantings, but crops could still
come through the cold snap unscathed, analysts said.
* "I think that (cold) would probably have a bigger impact on rapeseed
production at this stage of the game if you're looking at European markets,"
said Erin Fitzpatrick, a commodity analyst at Rabobank in London.
"We don't think the strong rally is justified by what's going on in Russia."
* Eyes were also on Russia, where First Deputy Prime Minister Viktor Zubkov
is due to make an announcement on Friday on how much grain the country can
export in the 2011-12 season before imposing a possible export duty, a
government source told Reuters on Thursday.
* EU data released on Thursday showed the bloc has exported much less soft
wheat so far this season than it had done a year ago.
SPAIN
* Physical wheat prices in import-dependent Spain jumped in response to
sharp gains in prices offered by exporters in the cold-ravaged Black Sea region.
* The gains were magnified by the thin volume during a seasonal downturn in
livestock numbers in what is home to Europe's biggest pig feed industry.
* Dealers said feed compounders were reluctant to take large positions after
being caught out by a rally in January, when many had expected prices to fall
due to hefty wheat imports under the European Union's TRQ system.
* "There isn't much buying interest, and consumers look like buying from
hand-to-mouth for a while. Only a fall in grain prices can change matters or a
rise in meat, which is improbable because farmers will want to maintain output,"
a dealer said in Spain.
* Prompt feed wheat in Tarragona, Spain's top grains port, was quoted at up
to 225 euros a tonne ex-store , up 6 euros from Tuesday, but
dealers could not confirm any trade at that level.
* German traders said demand for feed grain was switching back to the EU due
to firmness in Russian and Ukrainian prices.
* "Ukrainian feed wheat is currently being offered at 220 euros a tonne CIF
Spain or the equivalent of $290 a tonne for February shipment," a German trader
said. "EU-origin Black Sea wheat is about 219 euros CIF Spain, British feed
wheat 221 euros and French 228 euros."
* "This is giving Iberian buyers more interest in German feed wheat."
GERMANY
* German wheat fell in line with the drop in Paris, while traders said the
cold snap was not yet believed to have caused significant damage to wheat.
* Standard quality milling wheat for February delivery in Hamburg was
offered for sale down 1.5 euros at 216 euros a tonne, with buyers at around 214
euros.
* "There is a risk to crops but major damage is not yet suspected and will
probably only take place if temperatures remain very low," one trader said. "We
will have to wait and see if the cold spell actually continues."
* Strong demand from makers of animal feed kept German feed wheat prices
around the levels of milling wheat in parts of the country, a pattern seen for
the past three weeks.
* Feed wheat for nearby delivery in the South Oldenburg market near the
Netherlands was offered for sale close to milling wheat levels at 213 euros a
tonne, with buyers around 211 euros.
* Germany has larger volumes of feed wheat available after late rain hit the
north German crop.
ITALY
* Wheat and maize prices in Italy, a major grain importer in Europe, were up
from a week ago on the back of upturns in Paris and tightening supplies of
locally grown cereals, traders said.
* Bread-quality soft wheat jumped 7 euros to 220-225 euros a tonne for
prompt delivery, ex-store, while higher-grade wheat was up 2-3 euros to 231-236
and 233-237 euros a tonne, depending on quality, weekly trade data from
Bologna's cereals bourse showed on Thursday.
* Imported French wheat jumped 15 euros on the week to 236-240 euros a
tonne, while domestic maize added 6 euros to 206-207 euros a tonne, the data
showed.
* Prices as of 1644 GMT

Product Last Change Pct Move End 2011 Ytd Pct
Paris wheat 209.50 -1.50 -0.71 195.25 7.30
London wheat 166.50 -0.60 -0.36 153.65 8.36
Paris maize 208.25 -1.75 -0.83 197.25 5.58
Paris rape 428.25 -0.25 -0.06 421.50 1.60
CBOT wheat 684.00 -3.50 -0.51 671.25 1.90
CBOT corn 650.75 2.50 +0.39 654.75 -0.61
CBOT soybeans 1231.25 7.00 +0.57 1207.75 1.95
Crude oil 9 5.91 -1.70 -1.74 98.83 -2.95
Euro/dlr 1.32 0.00 -0.00 1.30 1.57
* All grain and oilseed prices for second position. Paris futures prices in
Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.

(Reporting by Martin Roberts in Madrid, Michael Hogan in Hamburg, Valerie
Parent in Paris and Svetlana Kovalyova in Milan, editing by Jane Baird)