UPDATE 1-European wheat edges down in step with U.S. futures

(Updates prices)
AMSTERDAM, Aug 13 (Reuters) - European wheat futures extended losses on
Monday, following Chicago Board of Trade futures, as the market let off steam
after a closely watched U.S. government report slashed corn and soybean output.
* Paris prices were also curbed by a sale of Russian wheat to Egypt at the
weekend and harvest progress in northern France amid sunny weather, traders
said.
* A third milling wheat tender in several weeks by Algeria, however, showed
more potential export demand for French wheat.
* Benchmark November milling wheat on the Paris-based futures market
was down 6.00 euros or 2.27 percent to 258.00 euros a tonne by 1559 GMT after
falling through the 260.00 euros threshold.
* The next support level is estimated at around 254.50-254.25 euros/tonne,
according to traders.
* "It's consolidating like in U.S. markets where wheat fell through the $9
per bushel level and corn is testing the $8 threshold," a Euronext trader said.
* On Friday, the U.S. Department of Agriculture (USDA) cut its forecast for
corn production in the United States by 17 percent in its first survey-based
report detailing damage from the country's drought, intensifying fears that the
world is heading for a repeat of the 2008 food supply crisis.
* Corn futures hit a record high on Friday immediately after the USDA's
monthly crop report, but fell by the close of trade.
* "A bullish market always needs to be fed with bullish and today we don't
have much," an export trader said.
* France, the United States and G20 president Mexico will hold a conference
call at the end of August to discuss whether an emergency international meeting
is required to tackle soaring grain prices caused by the worst U.S. drought in
half a century.
* Egypt, the world's biggest wheat importer, snapped up 120,000 tonnes of
competitive Russian wheat over the weekend, taking advantage of existing
surpluses before they dry up, traders said.
* Only one offer of French wheat was made at around $18 FOB more than the
price Egypt negotiated with Russia. Traders said Cairo raised its humidity
requirements, penalising the French offer.
* The latest tender from Algeria, which is seeking wheat for September and
October, could bring a sale for France.
* Algeria also bought at least 400,000 tonnes of durum wheat, likely to come
from Canada and the United States, traders said.
* Traders said more activity from importers was expected soon, with Tunisia
tipped to tender and Morocco facing a headache after a tender to buy 300,000
tonnes of U.S. soft wheat under a trade agreement failed to attract any bids.

* Farm office FranceAgriMer has raised its forecast for this year's French
soft wheat crop to more than 36.5 million tonnes, higher than last year's 34
million as it confirmed a wet spring had helped after a severe winter frost.
* The quality of the wheat harvest was satisfactory, FranceAgriMer said,
citing protein content mostly between 11 and 11.5 percent, with some results at
up to 12 percent and some below the average range.

* Prices as of 1612 GMT

Product Last Change Pct Move End 2011 Ytd Pct

Paris wheat 257.75 -6.25 -2.37 195.25 32.01
London wheat 194.75 -1.25 -0.64 153.65 26.75
Paris maize 251.00 -3.75 -1.47 197.25 27.25
Paris rape 508.50 -4.00 -0.78 421.50 20.64
CBOT wheat 869.75 -15.50 -1.75 671.25 29.57
CBOT corn 793.50 -6.50 -0.81 654.75 21.19
CBOT soybeans 1671.00 -38.50 -2.25 1207.75 38.36
Crude oil 92.68 -0.19 -0.20 98.83 -6.22
Euro/dlr 1.23 0.02 +1.87 1.30 -4.75
* 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 Valerie Parent in Paris and Ivana Sekularac in Amsterdam; editing
by Nina Chestney)