EU wheat down on bearish USDA report

AMSTERDAM: European milling wheat futures edged lower on Friday after a US Department of Agriculture (USDA) report showed higher-than-expected grain stocks .

* By 1550 GMT the most traded contract on Euronext milling wheat futures, March, was 0.9 percent lower at 173.75 euros a tonne for around 7,000 lots. Front month January was 0.4 percent lower at 179.00 euros a tonne.

* A bigger-than-expected stocks forecast from the US Agriculture Department pressured Chicago Board of Trade corn, soy and wheat futures early on Friday, traders said.

* The world is harvesting its largest-ever wheat, corn and rice crops this year, easing tight supplies that drove world food prices to record levels earlier this year, the US government forecast on Friday.

* Europe secured an historic agreement to draft a new treaty for deeper economic integration in the euro zone on Friday, but Britain, the region's third-largest economy, refused to join the other 26 countries in a fiscal union and was isolated.

* European Union grain trade lobby Coceral raised its forecast for the bloc's soft wheat harvest in 2011 to 129.64 million tonnes on Friday, up from 128.39 million tonnes estimated in October.

* "The least we can say is that there is a lot of wheat throughout the world," one trader said.

* The benchmarch contract on euronext for new crop fell 1.1 percent, following the general bearish trend but also due to beneficial rainfall in western Europe.

* The French cash market was quiet as the Christmas break approached.

* French rapeseed tumbled by 5 euros to 421 euros per tonne, on the back of the big drop in the US soybean.

GERMANY

* In Germany, prices followed Paris and US markets down after the bearish US Department of Agriculture report. The return of the Rhine and Danube to normal levels meant dealers were seeking to fulfil deliveries delayed because of the low water which had prevented vessels from sailing full.

* Standard new crop bread-quality wheat for January delivery in Hamburg was offered for sale down two euros at 189 euros a tonne with buyers at around 188 euros.

* Hamburg selling prices remained 11 to 12 euros above Paris futures due to farmers retaining produce in the belief 2012 supplies will be tight after Germany's disappointing 2011 wheat harvest.

* The return of water levels on the Rhine and Danube rivers were making transport easier and traders were scrambling to organise shipment of delayed loads.

* "Freight prices on the Rhine and Danube are not quite back to normal levels and the situation may not fully normalise for a couple of weeks," another trader said. "The low water levels meant more ships were needed to carry consignments as the vessels could not sail fully loaded."

* "This means Rhine and Danube ships are much more widely dispersed than normal and it will take some time before normal vessel positioning and loading patterns are resumed."

* The Danube is an important route for Hungarian and other east European maize shipments to the west, especially the giant Dutch animal feed industry.

* "Vessel positioning on the Danube may take longer than the Rhine to return to normal," the second trader said. "With the Christmas break also approaching, this means we may not see the first maize shipments from Hungary to Holland until the second half of January."

Copyright Reuters, 2011