UPDATE 1-European wheat pares gains tracking U.S. market

(Adds new comments, updates prices)
MILAN, March 13 (Reuters) - European wheat prices pared gains in late
trade as an overnight rise in U.S. wheat futures ran out of steam, while new
crop prices remained supported by concerns about dry weather in some parts of
the bloc, traders said.
* By 1652 GMT front-month May milling wheat on the Paris-based
Euronext milling wheat futures <0#BL2:> was 0.5 euro or 0.24 percent lower at
211.00 euros a tonne after hitting 214.50 euros in earlier trade.
* The next resistance was pegged at 216.25/216.50 euros.
* New crop prices remained in the positive zone due to worries about the
impact on crops of lasting dry weather in several key producers including
France.
* "It's mainly wheat that flattens. Maize remains strong, above the level of
210 euros (for June delivery)," a Euronext trader said.
* U.S. wheat was mostly lower and corn was mixed on profit taking on the
Chicago Board of Trade, where soybeans jumped more than 1 percent on renewed
worries of tighter supplies following a drought in South America's crop belt.

* Traders noted European wheat's competitiveness was low against U.S. wheat
and particularly against South American wheat, which is increasingly competing
with French wheat on its traditional North African markets such as Algeria and
Morocco.
* Morocco is considering trimming economic growth projections for this year
because bad weather has hit its key agriculture sector, government officials
said on Tuesday.
* But at the same time some traders said French wheat remained high because
it did not need to find new markets.
* The French wheat cash market was firm, brokers said.
* "The cash market is tight on the near-term. But it's hard to say whether
it's new business or covering of a hefty lineup," one said.
* European rapeseed surged in the wake of U.S. soybean and crude oil prices
with front month May up 1 percent at 473.75 euros a tonne. The next
resistance was put at 478.00 euros.

GERMANY
* German wheat gave up earlier gains as Chicago wheat fell in early Tuesday
trade and as Paris dropped, but firm German feed wheat prices still provided
background support.
* Standard quality milling wheat for March delivery in Hamburg was offered
for sale unchanged at 219 euros a tonne with buyers at 218 euros.
* "The weaker international background took some shine off earlier gains but
the market remains well supported by high feed wheat prices and by uncertainty
as people are waiting for more details about French crop losses," one trader
said.
* Expectations of a good German grains crop this summer were helping to keep
German new crop prices well below old crop.
* New crop milling wheat for September delivery in Hamburg was offered for
sale at 203 euros at tonne with buyers around 201 euros.
* Germany's 2012 wheat crop will rise 6.3 percent on the year to 24.2
million tonnes from 22.7 million tonnes in 2011, the German Farm Cooperatives
Association said on Thursday in its first harvest forecast.
* Demand from animal feed producers kept German feed wheat prices around
milling wheat in parts of the country, repeating a pattern seen in past weeks.
* Feed wheat for nearby delivery in the South Oldenburg market near the
Netherlands was offered for sale at 219 euros a tonne with buyers at around 217
euros.
* "If transport costs allow, producers are selling milling wheat into the
feed market," a trader said. "This is giving background support to milling wheat
prices."
* The unexpectedly low feed grain exports in past weeks from the Black Sea
region have transferred buying interest back to EU feed wheat, with Spanish
purchasers recently buying German feed wheat.

ITALY
* Wheat prices in Italy, a major grain importer in Europe, rose on the week
driven by gains in Paris and Chicago, while prices are likely to fall in the
longer term as milling demand remains modest and maturing crops will give a
better idea of new output, traders said.
* Bread quality wheat rose 2 euros to 229-231 euros a tonne for prompt
delivery, including delivery charges at a key weekly session of Milan's grain
bourse, while some traders cited prices of 230-235 euros a tonne.
*"There is very little national wheat left on the market. People trade in
French, German, Hungarian, Austrian, Russian grain which is more linked to Paris
prices," said one Italian trader. "If demand was not so weak, prices would have
risen even higher."
* "Milling demand is rather weak. A lot of operators find it more and more
difficult to get bank financing. So they reduce purchases of grain and, while
general consumption of bread and pasta remains stable, they probably go using
inventories," one Italian grain analyst said.
* Maize prices added 2 euros on the week to 205-206 euros a tonne on Milan's
bourse, driven by efforts of some operators to close uncovered contracts, the
trader said.

* Prices as of 1652 GMT

Product Last Change Pct Move End 2011 Ytd Pct

Paris wheat 211.00 -0.50 -0.24 202.50 4.20
London wheat 169.05 0.30 +0.18 153.65 10.02
Paris maize 211.50 2.50 +1.20 196.75 7.50
Paris rape 473.75 4.75 +1.01 438.25 8.10
CBOT wheat 653.00 0.25 +0.04 652.75 0.04
CBOT corn 672.50 1.00 +0.15 646.60 4.01
CBOT soy 1347.75 17.25 +1.30 1198.50 12.45
Crude oil 107.20 0.86 +0.81 98.83 8.47
Euro/dlr 1.31 0.00 -0.30 1.30 1.22
* Paris futures prices in Euros per tonne, London wheat in pounds per
tonne and CBOT in cents per bushel.

(Reporting by Svetlana Kovalyova in Milan, Michael Hogan in Hamburg, Valerie
Parent in Paris; Editing by Alison Birrane)