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EU wheat firm after analyst cuts Russian crop outlook
PARIS Aug 30 (Reuters) - European wheat prices were slightly higher on Thursday after a sharp rise the previous day, supported by new cuts in forecasts for Russia's drought-hit wheat crops ahead of a key meeting on Friday where export curbs may be discussed.
* Leading Russian grain analyst SovEcon on Thursday cut its wheat harvest forecast to 38 million tonnes from 39 million previously. The country would now have less wheat to supply domestic and export markets this season than it did in the 2010/11 crop year, when the government shocked markets with a snap decision to ban exports, it noted.
* Russia's Deputy Prime Minister is due to chair a meeting on Friday to discuss prospects for Russia's grain harvest and possible measures relating to exports.
* "Despite repeated denials, the market still fears that measures to restrict exports could be decided in the next few months, even though an official export ban can be regarded as unlikely," Commerzbank said in a note.
* Traders did not expect a decision to restrict exports to be taken this week but stressed that past experiences, notably in 2010, showed that Moscow's decisions were hard to predict and that the meeting could throw up hints of further moves.
* "In the meantime, Russian wheat flows outs at cheap, unbeatable, prices," one trader said, adding that many operators were selling at cut prices to exit the grain as fast as they could if and before any export restriction was taken.
* Europe's benchmark wheat price, the November contract on Paris-based milling wheat futures, was 0.1 percent higher by 1150 GMT at 265.25 euros a tonne.
* "The outcome of the Russian grain market meeting is being closely watched as any restrictions or statement about possible export restrictions could re-shape the export market," one German trader said.
* "Russia currently has the cheapest wheat in export markets but even a mild statement that restrictions are possible could push more demand towards France and Germany," he added.
* German prices followed Paris up in cautious trade ahead of Russia's meeting.
* Standard milling wheat for September delivery in Hamburg was offered for sale up two euros at 271 euros a tonne with buyers at around 269 euros.
* Trade was thin with many market participants traveling to a traders' event in Hamburg.
* Germany's wheat harvest is now finished apart from a very few minor areas in the north after rain delayed the start, traders said. Quality is viewed as satisfactory for both milling and export, with smaller volumes of feed wheat produced than thought.
* "Planting is now gathering speed and the first impressions are that some farmers are turning noticeably from wheat to rapeseed because of the current high oilseed prices," a trader said. "But it is too early to say if this is a national trend."
* Feed wheat futures in Britain were also higher as dealers continued to keep a close watch on harvest progress following recent heavy rains.
* November feed wheat rose 0.75 pounds or 0.4 percent to 205.50 pounds a tonne.
* Britain's wheat harvest is now 40 percent complete with wet weather in western and northern regions slowing progress, crop consultants ADAS said in a report on Thursday.
* Quality remained a concern with specific weights low and Hagberg falling numbers, a key measure of milling quality, beginning to decline.
* "Hagberg falling numbers are mostly within specification but there was a drop in the average from grain harvested this week, which could indicate some deterioration of quality of crops subject to harvest delays," the report said.
* Stocks of own-grown wheat held on farms in England and Wales have fallen to the lowest level in 12 years, Britain's farm ministry said on Thursday.
* Polish prices were little changed in the last week as buyers and sellers awaited a clearer picture of the country's harvest, which suffered from the very cold winter and rainy start to the summer.
* "Almost 80 percent of Poland's total grains area has already been harvested and yields are better than expected, which will lead to a higher crop than previously estimated," a Polish trader said.
* "Wheat quality is acceptable with higher protein levels than feared, wheat is generally reaching milling quality, therefore feed wheat supplies from farmers are thin," he added.
* New crop standard milling wheat delivered to Baltic sea ports is unchanged on the week at 1,000 zloty (238 euros) a tonne. Internal prices offered by millers were lower and ranging between 900 - 940 zloty (215- 224 euros) a tonne.
* German trader Toepfer currently estimates Poland's 2012 wheat crop at 7.7 million tonnes, down from 9.3 million tonnes in 2011 but up by 0.2 million tonnes from the trader's estimate in July.
* Another Polish trader added: "Prices did not change significantly during last 10 days. There is still a big difference between prices offered by exporters and by domestic feed and milling industry as the millers believe the harvest is not as bad as some people had thought after the very cold winter and wet summer, but the export outlook is good."
* "With the weakening zloty against the euro we expect that Poland will have good exports both to the EU and elsewhere this season," he said. (Reporting by Sybille de La Hamaide; editing by Keiron Henderson)
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