EU wheat futures flat, await sparkle for new rise
PARIS Aug 24 (Reuters) - European wheat futures were flat in thin trade on Friday with lower estimates for Russia's grain crops and worries about the Australian harvest compensated by a strong euro, which could hurt exports, and slow demand, traders said.
* By 1100 GMT, front month November milling wheat in Paris was unchanged at 264.00 euros a tonne. Since the end of last week the contract has gained nearly 0.5 percent.
* "I think we have not seen the highs, especially if the Southern hemisphere does not come to take the relay," said a trader who remained bullish on prices.
* Dry weather across Western Australia, the largest wheat producing state in the country, has triggered a series of downgrades in forecasts for yield projections.
* News about the Russian crop was also cause for concern. The International Grains Council on Thursday slashed its forecast for the country's wheat crop by 4 million tonnes to 41 million, now below the amount produced during the last drought in 2010, which led Russia to ban exports.
* In Moscow, the farm ministry said on Thursday that Russian wheat yields had fallen from last year although it gave no new crop forecast. Its latest forecast had put the wheat crop at 45 million tonnes.
* The ministry also cut its 2012 grain crop forecast to 75 million tonnes from the previously expected 75-80 million.
* "The wheat price should find support from new fears of export restrictions in Russia. Since the Russian government has revised its estimate for the grain crop down to 75 million tonnes, market players fear that Russia will not be able to export any more wheat from November," Commerzbank said.
* On the bearish front, traders noted that despite a thin drop on Friday the euro had remained firm against the dollar this week, hampering euro-denominated grains on international markets. The currency rallied to a seven-week high on Thursday.
* A lack of new demand on the export front and from animal feed makers added pressure on prices, one trader said.
* German prices were weaker in a delayed reaction to late weakness in Paris on Thursday, holding above Euronext on export hopes but with continued signs that Germany has gathered a large harvest of satisfactory quality a weakening factor.
* Standard milling wheat for September delivery in Hamburg was offered for sale down two euros at 269 euros a tonne with buyers at around 268 euros.
* "Overall the market is well underpinned by the hopes that we will see more export demand switched to west Europe because of the continued drought problems in Russia," one German trader said. "The euro's recent strength is a bit of a disappointment but the euro is still way down from its levels at this time in 2011 and in early 2012 so overall German wheat is looking export-competitive."
* Germany's own harvest outlook changed after sunshine in the last two weeks enabled very fast progress as repeated rain had delayed the start of the harvest.
* Germany will harvest 22.8 million tonnes of wheat this year, slightly up on the 2011 crop of 22.7 million tonnes, Germany's leading grain trading house Toepfer International said on Thursday.
* "The overall German wheat harvest quality is good apart from some problems with protein content which are not all that serious in a national context," another trader said. "It has been wetter in the last couple of days and with a rainy weekend forecast it now looks that we will not be finished in Germany until the middle of next week."
* "More of the harvest is reaching bread-quality than expected which means there will be less feed wheat around." (Reporting by Sybille de La Hamaide in Paris and Michael Hogan in Hamburg; Editing by Alison Birrane)
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