European wheat edges lower, U.S. weather weighs on prices

Wed Feb 6, 2013 7:52am EST

AMSTERDAM, Feb 6 (Reuters) - European grain futures were lower on Wednesday, level with a
three-week low set in the previous session as the market remained under pressure from forecast
rain in drought-hit U.S. growing areas.
    * Paris prices remained, however, broadly in a range of the past week, with operators
looking ahead to monthly supply/demand estimates from the U.S. government on Friday for fresh
impetus. 
    * March milling wheat on the Paris futures market was down 1.50 euros or 0.61
percent at 244.75 euros a tonne by 1216 GMT. The contract earlier dropped to 244.25 euros,
matching Tuesday's low which was a level previously touched on Jan. 11.
    * U.S. wheat edged lower to stay close to a three-week low, weighed down by the
forecasts of rain in the U.S. Plains. Wheat was also being pressured by corn, which fell again
on reports of rain relief in Argentina and expectations the U.S. Department of Agriculture
(USDA) will raise stocks in its Friday report due to weak demand. 
    * "People in the market are pretty hesitant," a futures dealer said. "The rain in the United
States won't end the drought but it's good news for crops."
    * "The market is subdued as we wait for the USDA report."
    * Prices remained underpinned by tight global supply of grains, with growing import needs
fuelling demand among the few exporters with readily available supply.
    * Russia approved on Tuesday a plan to suspend a grain import tariff, a move traders see
making imports feasible from the European Union and the United States. 
    * Brazil said it would allow 1 million tonnes of tariff-free wheat imports from outside the
Mercosur bloc, a volume that could be increased to 2 million depending on the situation in usual
supplier Argentina that had a weather-affected harvest. 
    * "We're still in a situation where global stocks are tight," another dealer said.
     
 * Prices as of 1245 GMT
                                                                                      
  Product             Last    Change   Pct Move End 2011 Ytd Pct 
 
 #VALUE!
  Paris maize         231.25    -1.75    -0.75   197.25    17.24
  Paris rape          466.50    -3.00    -0.64   421.50    10.68
  CBOT wheat          753.50    -4.00    -0.53   671.25    12.25
  CBOT corn           724.00    -5.00    -0.69   654.75    10.58
  CBOT soybeans      1483.50   -12.00    -0.80  1207.75    22.83
  Crude oil            95.61    -1.03    -1.07    98.83    -3.26
  Euro/dlr              1.35     0.14   +11.51     1.30     4.27
 * 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 Ivana Sekularac, editing by William Hardy)