European wheat up strongly on Greece, USDA

HAMBURG: European wheat futures rose again on Wednesday amid expectation Greece's parliament would pass a crucial austerity plan, coupled with a US government crop report on Thursday expected to show reductions in some sowings, traders said.

* European benchmark November milling wheat on Paris' Euronext exchange rose 4.1 percent or 8.0 euros to 203.00 euros a tonne at 1140 GMT. Paris futures had already risen 2 percent on Tuesday after closing on Monday at their lowest level since end-October.

* "We are in a typical technical rebound," one Euronext trader said. "Picking up 15 euros is not abnormal given that we lost 60 to 65 euros in a very short time, but there are not really any new fundamentals that could support this rise."

* Money flows rather were supporting wheat prices, one analyst said. Grains and other commodities were gaining from hopes the Greek debt crisis could be resolved.

* There are rising hopes in global financial markets that Greece's parliament would adopt a crucial austerity plan demanded by international lenders as a condition for providing more funds to prevent a debt repayment default.

* Traders also said they were taking positions ahead of the publication of the US Department of Agriculture (USDA) report on Thursday, which they expect to show a large drop in spring wheat areas after adverse weather hindered planting.

* Dealers said they were wary about the resilience of a rebound that has taken wheat futures from Monday's eight-month closing low of 187.50 euros a tonne back above the psychologically-important level of 200 euros a tonne.

* High global wheat stocks, the imminent return of large Black Sea producers on the international market, and a strengthening of the euro were still negative for European grain prices, traders said.

* Also weighing on European wheat prices was the belief that the 2011 harvest will not be as bad as initially expected after a prolonged drought.

GERMANY

* In the EU's second largest wheat producer Germany, prices rose in the wake of the rose bounce in Paris with the market also rising above the important 200 euro mark.

* Standard new crop bread-quality wheat for September and later delivery in Hamburg was offered for sale up eight euros at 208 euros a tonne with buyers around 206 euros.

* "Sellers are hoping for further price rises so dealing was a little restrained today," a trader said.

BRITIAN

* Feed wheat futures in London extended gains, with the November contract up 5.00 pounds or 3.4 percent at 169.25 pounds a tonne, tracking rises in Paris and Chicago.

* British dealers said wheat futures were rising in a technical bounce following the recent fall in grains markets which some regarded as being overdone.

* Recent rains have improved U.K. crop prospects in most regions.

* "The U.K. crops have come back into shape pretty well, there's big discrepancies between certain regions but in general they've improved, the rain has done them good," a U.K.-based broker said.

* Russia's export ban expires later this week but dealers said the bearish news was already factored into prices.

* "Russia's return has been accounted for over the past month, we're yet to see it happen -- so far (some) tenders have excluded it -- but at some point the grain will come out and the market has adjusted for it," the U.K.-based broker said.

Copyright Reuters, 2011