EU wheat at over 2-month top on US corn

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PARIS: European wheat futures rose on Monday to their highest in more than two months, buoyed by a corn-led rally in US markets, but waned after Chicago wheat futures failed to confirm the rise at the open.

* German cash prices stayed firm as rain continued to mar the harvest.

* US corn and soybean futures rose on Monday, supported by concerns that the harvest would fall below expectations due to stress on plants throughout the growing season.

* But gains were limited for wheat as forecasts of rain in the parched central and Southern Plains was expected to give a much-needed boost to soil moisture reserves ahead of hard red winter wheat planting.

* "It's really corn that's leading the way," a European futures broker said. "For the moment in Europe we're going along with the rise on US markets."

* Benchmark November milling wheat on the Euronext exchange closed up 3.75 euros or 1.78 percent at 214.00 euros ($310.8) a tonne, after rising to 215.25 euros ($312.5), a level last seen on June 17.

* It drew technical strength from Friday's close above the 210 euro threshold, having earlier last week broken out of a two-month-old range capped at 204-205 euros, traders said. It now faces resistance between 215 and 220 euros.

* In addition to spillover support from corn, wheat also remained underpinned by a rise in prices in Russia, which has dominated wheat export sales.

* A shipment of 15,000 tonnes of wheat aimed for Libya was expected to be loaded at the French port of Bordeaux later this week. The operator's name was not discosed.

* In a release after Chicago markets closed on Friday, farm newsletter Pro Farmer -- which organised a tour last week of Midwest corn and soybean fields -- pegged this year's corn yield at 147.9 bushels per acre, compared with the US government's latest estimate of 153 bushels.

* Operators are looking to the US Department of Agriculture's next weekly update on crop conditions, due at 2000 GMT, for more clues about US crop potential.

* But some analysts cautioned that much of the lost corn potential had been priced in and that European wheat could face seasonal pressure from the forthcoming maize harvest.

* "With a significant amount of German and French (wheat) crop already forward sold by the farmer, there is little selling pressure in the market currently," Jaime Nolan-Miralles, commodity risk manager with FCStone Europe, said.

* "But this is already showing signs of changing across several of our key markets as the trade makes room for what is expected to be excellent maize output for Europe."

* In oilseeds, November rapeseed added 9.25 euros or 2.18 percent to 433.50 euros ($629.5) a tonne, after touching 433.75 euros, a highest front-month level since Aug. 3.

GERMANY

* In Germany, prices rose following the strength in Paris coupled with continued concern about rain damage to the final stages of Germany's wheat harvest.

* Standard new crop bread-quality wheat for September and later delivery in Hamburg was offered for sale up 4 euros at 226 euros a tonne with buyers at around 224 euros.

* "It is now widely expected that the final stages of the wheat crop will be only animal feed quality," one German trader said. "Harvesting remains very difficult, with ground still soft and rain again falling in the north today."

* "Prices remain well over Paris. People are expecting further reductions to the harvest forecasts in Germany in the next couple of weeks."

* Wheat harvesting in key north German export regions is still unfinished. But harvesting in south and central Germany is largely complete with relatively good results, traders said.

* Farmers remained reserved sellers in the north as they were concerned they would not be able to deliver high quality, traders said.

* North German weather remained poor, with widespread showers on Monday after a cool weekend which did little to dry fields. More showers are forecast in north Germany up to late Wednesday.