HAMBURG:* European wheat prices dropped on Wednesday because of global concerns about whether European leaders will strike a deal to contain the euro zone's debt crisis at a critical meeting later in the day and after a sale of cheap Russian wheat to Egypt.
* The sharp fall of crude oil prices after weekly US inventory data showed an increase in crude stockpiles was also weighing on sentiment, traders said.
* European benchmark wheat, Paris' January contract , was down 2.0 euros or 1.08 percent to 184.00 euros a tonne by 1557 GMT.
* "Everyone is waiting to see to what tune our leaders are going to make us dance (to)," said a trader in Paris.
* Egypt's state grains buyer GASC bought Russian wheat in its tender on Wednesday, with aggressive offers from newcomer Ukraine opening up the prospect price war with Russia.
* "Russia still dominated the bidding but Ukraine came very close to winning the business in its first Egyptian tender for ages," one trader said. "The bearish signals were that EU wheat was well out of the contest and offers were also received for Argentine wheat."
* GASC added Ukraine to its list of approved origins for the first time in three years in a move to boost competition amongst Black Sea origin states.
* On a cost and freight basis with offers including shipping costs, the cheapest French offer was $29.70 per tonne higher than the accepted Russian offers while the Ukraine offer would be $6.78 more per tonne and Argentinian wheat offered would be $31.25 more per tonne.
* "This makes the degree of competition between the various origins clear," said GASC vice chairman Nomani Nomani.
* Some traders said they had been surprised to see a Ukrainian bid because there were still VAT regulation issues. They also said the price Ukrainian wheat was offered to Egypt was aggressively low.
* France is expected to produce close to 16 million tonnes of maize this year, with an average yield estimated at a record level between 10.4 and 10.5 tonnes per hectare, maize growers group AGPM said on Wednesday.
* But the large French crop figure had already been widely anticipated in the market.
* Traders also noticed news of an unusual sale of Ukrainian maize to Japan. "More sales like this could throw a spanner in the works for the international corn market and pressure export prices," a trader said.
GERMANY
* In the EU's second-largest wheat producer Germany, prices were weaker in hesitant trade ahead of the euro zone debt meeting with the result of the Egyptian tender also weighing.
* Standard new crop bread-quality wheat for January and later delivery in Hamburg was offered for sale down 3 euros at 191 euros a tonne with buyers around 189 euros.
* "The euro zone meeting is the main feature today while flour mills are also thought to have pretty good supply cover up to the end of the year," one German trader said. "The return of Ukraine to the Egyptian market is also bad news for EU export prospects."
* Traders also said large numbers of German farmers were believed to have made large sales of their wheat from the summer 2011 crop. This was likely to keep trade restrained in coming weeks while farmers were continuing with the maize harvest and winter grain sowings.
BRITAIN
* Feed wheat futures in London were higher with November up 1.10 pounds or 0.7 percent at 152.00 pounds a tonne.
* British dealers said activity on the physical market was quiet with farmers well financed and focused on sowing the new crop.
* "We have the farmer who isn't selling, we've got the threat of Ukrainian and Russian wheat, and the consumer isn't buying because he thinks the Russian wheat is going to be cheaper," a UK-based broker said.
* "Russia have taken the Spanish market away so all we're (the UK) going to is Holland and Ireland," the broker said.
* In recent years Spain has been one of the top buyers of UK wheat.
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