UPDATE 1-European milling wheat hits 3-week high

(Updates prices)
AMSTERDAM, June 19 (Reuters) - European milling wheat
futures extended gains in afternoon trade on Tuesday to hit a
three-week high as weather worries fuelled another surge in
grain prices in Chicago.
* New-crop U.S. corn futures surged 4 percent, on top of a
5.5 percent jump on Monday, as U.S. Department of Agriculture
(USDA) data showed a decline in crop ratings intensified
concerns about hot, dry weather in the U.S. Midwest.
* Fears about damage to U.S. corn and soybeans has allowed
grain markets to rally this week even as wider markets have been
erratic due to uncertainty over Europe's debt crisis and the
health of the global economy.
* "We are following Chicago. It is the weather that is
dominating markets today, not financial elements which remain
very fragile," said Michel Portier, head of grains consultancy
Agritel.
* Benchmark November milling wheat on the Paris
futures market was up 2.75 euros, or 1.33 percent, at 210.25
euros a tonne by 1524 GMT, off an earlier high of 212.50 euros,
a level last touched on May 29.
* The contract had accelerated to breach resistance at 210
euros before moving back towards this level that has acted as a
consolidation pivot for the contact this month.
* Midwest crop conditions also drove sharp gains for U.S.
soybeans, triggering a similar rise for European rapeseed which
hit the highest level in over a month as it was further fuelled
by the breaking of a chart resistance level.
* August rapeseed in Paris was up 10.50 euros, or
2.27 percent, at 473.00 euros a tonne after earlier reaching
477.00 euros, its highest level since May 11.
* Grain operators are nervous about potential crop damage to
U.S. corn and soybeans as the market is relying on a big harvest
to boost low stocks. They were also watching the crop outlook
in the Black Sea region, where observers were continuing to
scale back forecasts due to dry, hot weather this spring.
* A leading Russian analyst lowered his forecast for this
year's wheat crop in Russia to 50 million tonnes against 53
million previously, while the governor of the southern growing
region of Krasnodar said the wheat crop there could fall more
than 40 percent this year.
* In contrast, abundant spring rain has improved crop
prospects in France, Europe's major grain exporter.

GERMANY
* German prices were lifted by the rising Paris market, but
in a risk-avoidance mode as more rain improves Germany's harvest
outlook while concern grows about the crop in the Black Sea
region.
* Standard milling wheat for September delivery in Hamburg
was offered for sale up four euros at 217 euros a tonne with
buyers at around 215 euros.
* Feed wheat for nearby delivery in the South Oldenburg
animal feed grains market near the Netherlands was again quoted
over milling wheat, up three euros at 232 euros a tonne for
nearby delivery with buyers at around 230 euros.
* "There is still a risk-aversion mood in the market both
because of deep concern about the euro zone crisis and because
of uncertain harvest outlooks," one German trader said. "Rain in
the last couple of weeks has provided considerable relief to
most of German wheat plants but parts of east Germany are still
suffering from dryness."
* "Market attention is also increasingly on the Black Sea
weather, with more reports coming out about smaller crops
because of dryness in Russia and Ukraine."
* Scattered showers are forecast for Germany up to Saturday,
along with some rain in the most parched north eastern coastal
area of Mecklenburg-Vorpommern, an important wheat export
region.
* "Crops in the west and south of Germany are now looking
much better after the rain in the last two weeks but more is
still needed in the east, especially Mecklenburg-Vorpommern,"
another trader said.
* The German Farm Cooperatives Association last week cut its
forecast of the country's 2012 wheat harvest to 21.3 million
tonnes, 6.2 percent down on the 22.7 million tonnes Germany
harvested in 2011 following frost damage and a dry spring.

* Prices at 1555 GMT

Product Last Change Pct Move End 2011 Ytd Pct

Paris wheat 210.25 2.75 +1.33 195.25 7.68
London wheat 158.00 2.15 +1.38 153.65 2.83
Paris maize 193.75 5.50 +2.92 197.25 -1.77
Paris rape 471.50 9.00 +1.95 421.50 11.86
CBOT wheat 646.50 16.25 +2.58 671.25 -3.69
CBOT corn 562.50 25.50 +4.75 654.75 -14.09
CBOT soybeans 1423.75 53.50 +3.90 1207.75 17.88
Crude oil 84.04 0.77 +0.92 98.83 -14.97
Euro/dlr 1.27 0.02 +1.40 1.30 -2.07
* 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 Sybille de la Hamaide and Gus Trompiz in Paris,
Michael Hogan in Hamburg and Ivana Sekularac in Amsterdam;
editing by Keiron Henderson)