European wheat edges up on supply concerns

AMSTERDAM, Sept 10 (Reuters) - European wheat prices edged higher on Monday
on renewed concerns about tight supplies following reports of drought damage to
the Australian wheat crop, but a strong euro limited price movements, traders
said.
* By 1114 GMT, front month November on Paris-based milling wheat futures
<0#BL2:> was 0.2 percent higher at 265.50 euros a tonne for less than 5,000
lots.
* The euro slipped against the dollar on Monday but was still close to a
near four-month high hit on Friday when disappointing U.S. jobs data fanned
speculation the Federal Reserve may launch more monetary stimulus this week.

* A stronger euro makes euro priced products less attractive for exporting
markets and could hamper wheat exports.
* Wheat production in Australia, the world's no. 2 exporter, is expected to
drop to 22-23 million tonnes, analysts estimated. The figure is about 5-9
percent below a government forecast of 24.1 million tonnes and almost a quarter
less than last year's record output of 29.5 million tonnes.
* In France, the ministry cut its soft wheat crop estimate to 36.5 million
tonnes, from the 36.7 million tonnes it had forecast in August, taking the rise
to 7.5 percent against the 2011 harvest.
* Traders noted that activity was low, both on the futures market and on the
cash market, with silos full in the most important French ports, notably Rouen,
due to a lack of sales.
* "We are waiting for the Russians to pull out of the market in November,"
one Euronext trader said.
* Traders said the market was awaiting a USDA monthly report on Wednesday
and the results of two import tenders, by Syria and Jordan.
* Dry and hot weather in France over the past days is hurting maize plants,
now at the end of the development phase, and will probably lead to an early
harvest in the southwest where silos are already well filled.
GERMANY
* German prices followed Paris up with export hopes again supporting but
with business restrained ahead of the key USDA crop report on Wednesday.

* Standard milling wheat for September delivery in Hamburg was offered for
sale up 1 euro at 269 euros a tonne with buyers at around 267 euros.
* "I think the market is likely to remain restrained until the USDA report
on Wednesday which will give the latest views of the U.S. crops after the
drought damage in the Midwest this summer and recent rain there," one trader
said.
* "The USDA report gets a lot of attention from investors outside the grains
market and so can often cause unexpected price fireworks," he said.
* Prices remain supported by hopes Russian wheat is not plentiful for
delivery from November and that export demand may soon be transferred to west
Europe, as illustrated by Egypt's difficulty in buying Russian wheat in a major
purchase tender on Thursday.
* "The recent strength of the euro is disappointing but the export outlook
is still overall positive," a trader added.
* German feed wheat in the South Oldenburg market close to the Netherlands
was again quoted close to milling wheat, offered for sale unchanged at 266 euros
a tonne for September delivery with buyers around 264 euros.
* "We are facing tight feed grain supplies, not only because of the
well-publicised problems in the U.S. and Russia, but also because of corn
harvest problems in east Europe," another trader said. "Hungary
and Romania seem to be facing pretty substantial falls in their corn harvests."

* Prices as of 1140 GMT

Product Last Change Pct Move End 2011 Ytd Pct

Paris wheat 265.75 0.75 +0.28 195.25 36.11
London wheat 206.90 0.95 +0.46 153.65 34.66
Paris maize 255.25 0.00 +0.00 197.25 29.40
Paris rape 517.25 0.00 +0.00 421.50 22.72
CBOT wheat 884.75 0.00 +0.00 671.25 31.81
CBOT corn 798.75 3.75 +0.47 654.75 21.99
CBOT soybeans 1731.50 -0.25 -0.01 1207.75 43.37
Crude oil 96.19 -0.23 -0.24 98.83 -2.67
Euro/dlr 1.28 0.07 +5.54 1.30 -1.31
* 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, Michael Hogan in Hamburg and Ivana
Sekularac in Amsterdam, editing by William Hardy)