European wheat little changed, eyes on USDA report

AMSTERDAM, June 12 (Reuters) - European milling wheat futures were little
changed in quiet trade as operators awaited direction from closely watched
monthly supply and demand estimates from the U.S. government later in the day.
* A mixed trend in U.S. grains, with small gains for wheat and a slight drop
for corn, added to the downbeat tone in Paris.
* Benchmark November milling wheat on the Paris futures market was
down 0.75 euros or 0.36 percent at 209.00 euros ($260) a tonne by 1113 GMT as it
continued to consolidate around 210 euros, which has become a pivotal level for
the contract.
* The U.S. Department of Agriculture's world estimates at 1230 GMT are being
watched in particular for adjustments to the U.S. corn supply, with many
operators expecting the USDA to cut its initial corn yield estimate, which they
see as too optimistic.
* "It's almost obligatory for them to lower the corn yield, but the question
is by how much," a French futures dealer said.
* Dry weather in the U.S. Midwest has fueled expectations of declining yield
potential, and weekly USDA crop ratings on Monday showed a bigger fall for corn
than anticipated.
* Operators were also watching to see if the USDA adjusted in its Tuesday
report its forecast for corn demand, which would impact use of fellow grain
wheat and could further tighten U.S. corn stocks.
* This month's USDA report is also attracting attention following changes to
trading hours for U.S. futures, which will now trade during the release of the
data, a move that could remove volume from Paris futures.
* French wheat growers group AGPB estimated this year's crop at 33.9 million
tonnes, close to 2011 output, as a drop in area due to winter damage would be
offset by a rise in yield compared with last year's drought-affected level, it
said.
* Wet spring weather had helped crops recover from winter frost, and
continuing rain in June should not threaten crop quality after farmers treated
plants for disease, it added.
* European rapeseed futures were slightly lower, pressured by weaker crude
oil and vegetable oil markets, but strength in soybean prices and tight rapeseed
supply in Europe continued to underpin the market.
* August rapeseed was down 0.50 euros or 0.11 percent at 471.00 euros a
tonne.

GERMANY
* German prices dropped in line with the weakness in Paris, with many market
participants taking to the sidelines until the impact of the USDA report can be
assessed.
* Standard milling wheat for September delivery in Hamburg was offered for
sale down 1 euro at 215 euros a tonne with buyers at around 214 euros. Old crop
milling wheat was offered for sale at around 224 to 225 euros a tonne but with
little purchase interest.
* Feed wheat for nearby delivery in the South Oldenburg animal feed grains
market near the Netherlands was down 1 euro at 230 euros a tonne for nearby
delivery with buyers at around 229 euros.
* "The USDA world supply and demand report regularly provides market
fireworks, and this is the first time the report will be released into a trading
Chicago market after the extension of trading hours, which is adding extra
caution today," one German trader said.
* "I think a lot of players in Germany have decided to stand aside today to
see how Chicago reacts."
* German flour mills are thought to have generally good supply cover up to
the new crop. The high feed wheat prices continue to underpin milling wheat
prices, traders said.
* The rain in much of Germany in the past week has provided relief to plants
after a dry spell and relieved concern about dryness damage to the new crop.
* More rain is forecast for Germany from Tuesday to Wednesday but with drier
weather from Thursday to Saturday.

* Prices as of 1125 GMT

Product Last Change Pct Move End 2011 Ytd Pct

Paris wheat 209.25 -0.50 -0.24 195.25 7.17
London wheat 156.50 -0.30 -0.19 153.65 1.85
Paris maize 192.25 0.25 +0.13 197.25 -2.53
Paris rape 470.75 -0.75 -0.16 421.50 11.68
CBOT wheat 637.25 6.75 +1.07 671.25 -5.07
CBOT corn 537.50 -3.00 -0.56 654.75 -17.91
CBOT soybeans 1405.00 6.00 +0.43 1207.75 16.33
Crude oil 82.52 -0.18 -0.22 98.83 -16.50
Euro/dlr 1.25 -0.02 -1.50 1.30 -3.42
* 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.
($1 = 0.7993 euros)

(Reporting by Valerie Parent in Paris, Michael Hogan in Hamburg and Ivana
Sekularac in Amsterdam, editing by Jane Baird)