MILAN: European wheat prices edged higher after falling earlier in hesitant trade on Friday, taking a breather after a 3 percent gain earlier this week and after rising 30 percent in the last month, and as drier weather in France was lifting pressure on quality and allowing a restart in harvests.
* A wider fall on equity and crude oil markets added pressure on grain prices.
* By 1613 GMT, benchmark November on Paris-based milling wheat futures was 0.28 percent higher at 268.25 euros a tonne, after falling to 265.50 in earlier trade.
* "Prices are levelling off. We are tired of rising," a cash broker in Brittany said.
* Rainfall stopped in most parts of France and weather forecasters predicted sunny and dry weather next week.
* "Harvests are progressing with better weather conditions. Barley and rapeseed cuttings are getting on, which reassures operators in terms of yields," analyst Agritel said in a note.
* But the upwards pressure remained as weather forecasters predicted a long-lasting drought in the US grains basket.
* "There is no end in sight to the price buoyancy, for the situation in the drought-plagued growing areas in the US Midwest is becoming more and more precarious," Commerzbank said in a note.
* The rapid price surge is worrying and prices are likely to rise even further in the coming weeks, driven by US corn, Abdolreza Abbassian, senior economist and grain expert at the United Nations' Food and Agriculture Organisation (FAO), told Reuters.
* French brokers noted that the wheat crop's final quality in Europe's largest producer would be key for other grains such as barley and maize, also used in feed.
* European rapeseed prices rose 0.6 percent at 522.25 euros a tonne alongside higher US soybean prices.
GERMANY
* In Germany, prices were little changed lacking a clear direction from Paris, with the German market pausing after climbing 22 euros in the past week.
* Standard milling wheat for September delivery in Hamburg was offered for sale unchanged at 272 euros a tonne, with buyers at around 270 euros.
* "The German market is starting to look tired after the dramatic price rises in the past week and fortnight and I found it much more difficult to find buyers today," one German trader said. "The market was starting to have a more disciplined mood today."
* "The feeling remains overall bullish. The problem with the US corn crop means that corn will have to be replaced by something else on world markets and that is likely to mean more demand for feed wheat. Along with the weak euro this makes the export outlook in the EU positive."
* "This could support milling wheat prices as milling quality will be sold for feed if the price is high enough as we can see in parts of Germany now."
* German feed wheat for nearby delivery in the South Oldenburg animal feed grains market near the Netherlands was again quoted over milling wheat, offered for sale down 1 euro at 279 euros a tonne for nearby delivery, with buyers at around 277 euros.
* Strong demand has kept German feed wheat prices above milling wheat in past months.
* Germany has had repeated rain over the last three weeks, stopping the barley harvest and creating concern about quality damage to wheat.
* More rain fell on Friday but dryer weather with more sun is forecast at last from Saturday and most of Germany could have better harvest weather next week.
* "Hopefully the barley harvest could get going next week and a return to sunshine after such a rainy start to the summer would still mean wheat could be harvested in good shape although about two weeks later than hoped," another trader said.
POLAND
* Polish wheat prices were pushed up by this week's rise in European futures and cash markets with support also coming from continued wet and cool weather which is likely to delay the country's harvest start, Polish traders said.
* "Polish farmers were restrained sellers this week as delaying sales by even one day could bring more profits," a trader in Warsaw said. "Wet and cold weather in almost all of the country is delaying the harvest and could damage quality."
* "Consumers, the flour mills and feed mills, are showing first signs of nervousness and are looking for old crop grain, which is scarce."
* Standard new crop Polish milling wheat of 12 percent protein rose to 1,065 zloty a tonne (255 euros) from the previous week's level of 1,020 zloty (244 euros), carriage paid to the ports of Gdansk, Gdynia and Szczecin.
* New crop feed wheat rose from 960 zloty a tonne (230 euros) to 1,010 zloty (242 euros) carriage paid to Baltic Sea ports.
* "Warmer weather with sunshine and without rain is expected from coming Sunday for coming days, so perhaps the harvest outlook will improve," another trader said.
ITALY
* Wheat prices in Italy were little changed on Friday after rising more than 10 euros earlier this week and traders said they expected more price rises next week driven by the US drought-fed rally on major international markets.
* Bread wheat was traded at about 250 euros a tonne for prompt delivery, in line with prices at a weekly trading session at Bologna's grain bourse on Thursday, traders said.
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