European wheat pauses after rally

MILAN, July 20 (Reuters) - European wheat prices edged lower on Friday,
taking a breather after a 3 percent gain so far this week and 30 percent in the
last month, and as drier weather in France was lifting pressure on quality and
allowing a restart in harvests.
* A wider fall on equity and crude oil markets added pressure on grain
prices.
* By 1228 GMT, benchmark November on Paris-based milling wheat
futures <0#BL2:> was flat at 267.50 euros a tonne, after falling to 265.50 in
earlier trade.
* "Prices are levelling off. We are tired of rising," a cash broker in
Brittany said.
* Rainfall stopped in most parts of France and weather forecaster predict
sunny and dry weather next week.
* "Harvests are progressing with better weather conditions. Barley and
rapeseed cuttings are getting on, which reassures operators in terms of yields,"
analyst Agritel said in a note.
* But the upwards pressure remained with weather forecaster predicting a
long-lasting drought in the U.S. grains basket.
* "There is no end in sight to the price buoyancy, for the situation in the
drought-plagued growing areas in the U.S. Midwest is becoming more and more
precarious," Commerzbank said in a note.
* The rapid price surge is worrying and prices are likely to rise even
further in the coming weeks, driven by U.S. corn, Abdolreza Abbassian, senior
economist and grain expert at the United Nations' Food and Agriculture
Organisation (FAO), told Reuters.
* French brokers noted that the wheat crop's final quality in Europe's
largest producer would be key for other grains such as barley and maize, also
used in feed.
* European rapeseed prices rose 0.6 percent at 522.25 euros a tonne
in sympathy with higher U.S. soybean prices.

GERMANY
* In Germany, prices were little changed as Paris provided little momentum,
with the German market pausing after climbing 22 euros in the past week.
* Standard milling wheat for September delivery in Hamburg was offered for
sale unchanged at 272 euros a tonne, with buyers at around 270 euros.
* "The German market is starting to look tired after the dramatic price
rises in the past week and fortnight and I found it much more difficult to find
buyers today," one German trader said. "The market was starting to have a more
disciplined mood today."
* "The feeling remains overall bullish. The problem with the U.S. corn crop
means that corn will have to be replaced by something else on world markets and
that is likely to mean more demand for feed wheat. Along with the weak euro this
makes the export outlook in the EU positive."
* "This could support milling wheat prices as milling quality will be sold
for feed if the price is high enough as we can see in parts of Germany now."
* German feed wheat for nearby delivery in the South Oldenburg animal feed
grains market near the Netherlands was again quoted over milling wheat, offered
for sale down 1 euro at 279 euros a tonne for nearby delivery, with buyers at
around 277 euros.
* Strong demand has kept German feed wheat prices above milling wheat in
past months.
* Germany has had repeated rain over the last three weeks, stopping the
barley harvest and creating concern about quality damage to wheat.
* More rain fell on Friday but dryer weather with more sun is forecast at
last from Saturday and most of Germany could have better harvest weather next
week.
* "Hopefully the barley harvest could get going next week and a return to
sunshine after such a rainy start to the summer would still mean wheat could be
harvested in good shape although about two weeks later than hoped," another
trader said.
* Germany's Farm Cooperatives Association said on Tuesday it has raised its
forecast for Germany's 2012 wheat harvest to 21.9 million tonnes from 21.3
million tonnes estimated in June. Germany harvested 22.7 million tonnes of wheat
in 2011.

* Prices as of 1227 GMT

Product Last Change Pct Move End 2011 Ytd Pct

Paris wheat 267.50 0.00 +0.00 195.25 37.00
London wheat 193.50 -0.50 -0.26 153.65 25.94
Paris maize 251.25 -1.50 -0.59 197.25 27.38
Paris rape 524.00 1.50 +0.29 421.50 24.32
CBOT wheat 929.50 -5.50 -0.59 671.25 38.47
CBOT corn 809.50 1.75 +0.22 654.75 23.63
CBOT soybeans 1762.50 28.75 +1.66 1207.75 45.93
Crude oil 90.92 -1.74 -1.88 98.83 -8.00
Euro/dlr 1.22 -0.01 -0.67 1.30 -5.85
* 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 Marion Douet in Paris, Michael Hogan in
Hamburg, Svetlana Kovalyova in Milan)