(Updates with late fall after USDA report)
AMSTERDAM/PARIS, March 8 European wheat futures turned downwards
in late trading on Friday to set a new eight-month low after a closely watched
U.S. government report raised wheat supply by more than expected.
* In monthly supply/demand estimates issued shortly before the close in
Paris, the U.S. Department of Agriculture did not make dramatic revisions but
pressured wheat markets by increasing projected wheat stocks in the United
States and worldwide.
* It also cut soybean production in Argentina by less than anticipated and
raised world soy stocks. Corn prices were supported by a slight cut in global
stocks and the absence of an increase to U.S. supply, but was not enough to
spill over into wheat and soy.
* "Overall it's a rather bearish report," a French dealer said. "World wheat
stocks were increased by 1 percent when the market saw them being unchanged.
That is what is weighing on wheat."
* Benchmark May milling wheat on the Paris futures market settled
0.3 percent lower at 230.25 euros a tonne, just off a low of 230 euros hit at
the close. It was the second straight session in which the contract set a lowest
level since July 2.
* New-crop November touched a lowest level in more than eight months
at 206.00 euros.
* Wheat prices have been weighed down this week by growing signs of a
recovery in global supply.
* However, brisk weekly wheat exports in both the European Union and the
United States suggested the pullback in prices was stirring demand.
* In France, weekly crop ratings from farm agency FranceAgriMer showed
sowing of spring barley picked up last week, with 20 percent of the area sown by
March 5, up from just 7 percent the prior week, although still down from 35
percent a year earlier.
* Sunny weather late last week and early this week was expected to have
accelerated fieldwork after a wet winter in northern France, although the return
of showers since the middle of this week may slow spring planting again.
* The main concern for western European crops remains the UK, where
extremely wet weather since last year has hampered planting. The winter wheat
area in England and Wales is down 25 percent on year at 1.39 million hectares,
the Home-Grown Cereals Authority said on Friday.
* Dealing in Germany's market was restrained, with some operators deciding
to hold back until Monday before reacting to the USDA estimates.
* Standard milling wheat for March delivery in Hamburg was offered for sale
up 1 euro at 248 euros a tonne with buyers at around 246 euros, with prices
marked up to reflect the strength in Paris.
* "Quite a few people decided to take to the sidelines today as the USDA
report is issued so late in the day," one German trader said.
* German prices continued to hold above Paris levels because of tight
supplies and continued export hopes, although recent favourable estimates of
wheat output have weakened premiums, dealers said.
* "U.S. wheat still looks the cheapest on world markets but the high volume
of 607,000 tonnes of EU wheat export licences awarded in the last week is
encouraging," another trader said.
* "The total licences included 241,000 tonnes taken by traders in Germany
possibly for recent sales to Saudi Arabia but also possibly to be used for
exports from eastern EU states like Romania."
* EU wheat export licences taken in one country can be used to export wheat
from any EU state.
* Prices as of 1758 GMT
Product Last Change Pct Move End 2012 Ytd Pct
Paris wheat 230.00 -1.00 -0.43 248.75 -7.54
London wheat 199.25 0.00 +0.00 210.25 -5.23
Paris maize 219.75 0.75 +0.34 237.75 -7.57
Paris rape 470.50 -0.50 -0.11 456.25 3.12
CBOT wheat 679.50 -7.25 -1.06 778.00 -12.66
CBOT corn 717.75 6.25 +0.88 698.25 2.79
CBOT soybeans 1500.00 -3.50 -0.23 1418.75 5.73
Crude oil 91.24 -0.32 -0.35 91.82 -0.63
* Front-month contracts except second month for Paris and London
wheat. Paris futures prices in euros per tonne, London wheat in
pounds per tonne and CBOT in cents per bushel.
(Reporting by Gus Trompiz in Paris, Michael Hogan in Hamburg and Ivana
Sekularac in Amsterdam; editing by Keiron Henderson)