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Wheat crop prospects weaken further in Europe as harvest unfolds

* French soft wheat harvest results disappointing

* Analysts revise estimates below 30 mln T, lowest since 2003

* Late rain raise concern in Germany, Poland

* UK crop seen down on year, possible disease problems

By Sybille de La Hamaide

PARIS, July 22 (Reuters) - Prospects for the soft wheat harvest deteriorated sharply in Europe in recent weeks due to worse than forecast damage from torrential spring rain, prompting analysts to slash crop estimates with French output seen at its lowest in 13 years.

Consultancy ODA Groupe expects the 2016 crop in the largest EU wheat producer and exporter to be less than 30 million tonnes, down from 32 million pegged last week and 35 million estimated on July 6, ODA President Renaud de Kerpoisson told Reuters on Friday.

ODA’s latest estimate would be the lowest French soft wheat harvest since 2003 and is far below the record 2015 crop of nearly 41 million tonnes.

“The situation in some areas is even worse than expected,” de Kerpoisson said, stressing the estimate was still provisional as harvesting is in its early stages in key producing regions in northern France, hit by heavy rains and a lack of sunshine.

Concerns over the French crop supported Euronext milling wheat futures, with front-month September rising more than 4 percent on Thursday and up another 1.5 percent in early Friday trade.

French consultancy Agritel said it was working on the basis of a wheat harvest of less than 32 million tonnes, down from 37.26 million estimated after its June 20-24 crop tour, but the volume could end up even lower.

“Over the past month the situation greatly worsened,” Agritel analyst Sebastien Poncelet said, noting some grains counted in the tour hadn’t fully developed. “It would not be surprising to see the crop fall below 30 million tonnes.”

FranceAgriMer data showed on Friday French wheat crop conditions deteriorated again last week, with 42 percent rated good or excellent, down from 49 percent a week earlier.

Quality was also a concern, mainly specific weight, an important criteria on the export market. But the fall in yields prompted a sharp rise in protein levels.

LATE RAIN

In Germany there were also worries about rain damage.

“Late-season rain is not good for wheat,” one analyst said. “There is concern about protein loss after the repeated rain in June and July, but no overall picture can yet be seen.”

Agritel pegged the German wheat harvest at 26.03 million tonnes this year, down 1.9 percent from a hefty crop in 2015, basing its estimate on a crop tour in early July.

Traders said the main concern about damage was to wheat in south and central Germany, where rain was heaviest.

Late rain is also a worry in the fourth-largest producer Poland, said analyst Wojtek Sabaranski of Sparks Polska, which forecasts Poland will harvest 10.7 million tonnes of wheat, down 10 percent from 2015.

Wheat harvesting is expected to start in coming days in south Poland but it may be another seven to 10 days before the harvest starts in other regions as some fields have to dry following heavy rain, he said.

In Britain, the wheat harvest is expected to get underway later this month but should not be in full flow until August.

Some traders expect the crop to total between 15.0 and 15.5 million tonnes, with both yields and area expected slightly down on last season when the crop totaled 16.4 million tonnes.

“We’ve had relatively dull weather for most of grain fill so that could be a slight negative for yields,” said analyst Susan Twining of consultants ADAS.

There is also concern about possible problems with fusarium which can produce mycotoxins. (Additional reporting by Valerie Parent in Paris, Michael Hogan in Hamburg and Nigel Hunt in London; Editing by David Holmes)

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