May 4, 2012 / 4:26 PM / 5 years ago

UPDATE 1-Europe wheat falls on oil prices, improved weather

(Adds new comments, updates prices)	
    MILAN, May 4 (Reuters) - European milling wheat for the new crop season fell
sharply on Friday afternoon due to disappointing U.S. payroll data, a more than
3 percent drop in crude oil prices and improved crop conditions in top producer
France.	
    * Benchmark November contract turned negative in afternoon trade,
falling 1.76 percent to 195.25 euros ($260) per tonne by 1605 GMT, hitting a
seven-week low after breaking the support level of 198.50 euros. 	
    * "All U.S. indicators have turned negative with crude the main sell-off
factor," one trader said of the main driving force on the market.	
    * May milling wheat, the last contract for the 2011 crop, however,
gained 2.50 euros or 1.15 percent at 220.00 euros a tonne, helped by technical
adjustments ahead of expiry on May 10.	
    * U.S. grain and soybean futures fell on Friday as weak U.S. payrolls data
sparked broad-based selling. 	
    * Recent weather conditions have improved the soft wheat crop outlook in
France, traders said.	
    * Farm office FranceAgriMer said on Friday an estimated 65 percent of French
soft wheat crops were in good or excellent condition by April 30, up three
percentage points from a week earlier. This is 10 percentage points higher than
the same week in 2011. Durum wheat development conditions improved, with 49
percent of the crop in good or excellent conditions, up three percentage points
on last week.	
    * Water reserves in France rose across the country last month helped by
rainfall 65 percent above the long-term average, the farm ministry said in a
monthly weather report.	
    * France said late on Thursday it had obtained a green light from the
European Commission to grant payments to farmers threatened by frost damage,
because resowing could make it difficult for them to follow environmental rules.	
    * Euronext rapeseed prices fell sharply on Friday, in line with a 3 percent
fall in oil prices. The 2012 benchmark contract November fell by 7.7
euros, down 1.58 percent to 466.25 euros, breaking a key support level of 470.00
euros and hitting a five-week low.	
    	
    GERMANY	
    * German feed wheat was again offered for sale at prices over bread-quality
wheat, continuing a pattern seen in recent weeks of strong demand from animal
feed makers.	
    * Standard milling wheat for May delivery in Hamburg was offered at 232
euros a tonne, once more holding well over Paris prices, but down 1 euro because
of lack of buying interest.	
    * Feed wheat for nearby delivery in the South Oldenburg market near the
Netherlands was offered at 237 euros a tonne, with buyers at around 236 euros.	
    * "The pattern of strong feed wheat demand continues to drive the market,
with bread-quality wheat sold for feed in some regions once more," one German
trader said.	
    * Talk of imports of Romanian feed into Germany has not cooled feed wheat
prices, traders said. Wheat demand from Poland was also supportive.	
    * German new crop prices are well below old crop after rain in the past two
weeks helped relieve parched crops. Standard milling wheat for Hamburg delivery
in September was offered for sale at 208 euros a tonne, with buyers at 207
euros.	
    * Recent rain has helped ease fears that German new crop wheat will suffer
damage from the recent dry spell. Widespread rain is also forecast in much of
Germany over the weekend.	
    * "We have experienced some good volumes of rain both in north and south
Germany, which has done a lot to help wheat and other plants," one German
analyst said. "I do not think we are currently facing any more loss of wheat
area from dryness in addition to the losses caused by the cold winter weather."	
    	
    ITALY	
    * Wheat prices in Italy, a major grain buyer in Europe, were little changed
on the week in a balance between modest milling demand and thinning supplies of
local grain. Traders expected prices to ease in the coming weeks on expectations
of a new crop hitting the market.	
    *"We are getting close to harvesting. There was some concern about a
drought, but recent rains have helped to improve the situation. There is a lot
of very good wheat in the fields," one grain broker said. 	
    * Bread quality wheat traded at about 240-242 euros a tonne for prompt
delivery, including delivery charges, in line with last week's prices on major
grain bourses in northern Italy, traders said.	
    	
 * Prices as of 1607 GMT
                                                                    
  Product             Last    Change   Pct Move End 2011 Ytd Pct 
 
  Paris wheat         220.00     2.50    +1.15   195.25    12.68
  London wheat        173.00    -4.00    -2.26   153.65    12.59
  Paris maize         213.25    -1.75    -0.81   197.25     8.11
  Paris rape          472.25    -7.75    -1.61   421.50    12.04
  CBOT wheat          594.00   -14.25    -2.34   671.25   -11.51
  CBOT corn           654.50     3.75    +0.58   654.75    -0.04
  CBOT soybeans      1462.00    -6.75    -0.46  1207.75    21.05
  Crude oil            98.44    -4.10    -4.00    98.83    -0.39
  Euro/dlr              1.31    -0.01    -0.42     1.30     1.08
 * 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.
 
 ($1 = 0.7625 euros)	
	
 (Reporting by Valerie Parent in Paris, Michael Hogan in Hamburg, Svetlana
Kovalyova in Milan, editing by Jane Baird)

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