European wheat futures pare gains in team with Chicago

European wheat futures pared gains in afternoon trade, following a similar trend on US markets and after failing to hold above the psychological level of 190 euros per tonne on the front-month contract. Weather concerns in the United States, with disappointing harvest yields in key hard red winter wheat-growing areas of the US Plains, had pushed up prices in earlier trade.
By 1538 GMT November milling wheat was unchanged at 188.50 euros a tonne.
"Successive increases in analyst forecasts for the European wheat crop are capping attempts to rebound," one Euronext trader said.
Analyst Strategie Grains raised its forecast of this year's soft wheat harvest in the European Union by 2 million tonnes to 139.4 million tonnes as good growing conditions boosted yield prospects in several countries.
Offre et Demande Agricole raised its monthly estimate of the EU wheat crop by 2.6 million tonnes to 138.5 million tonnes. It warned, however, abut potential quality problems in Romania and Bulgaria due to recent rain in the east of the countries.
Low wheat prices have generated more purchasing interest by importers this week with Saudi Arabia, Taiwan, Tunisia, Jordan and the Philippines among those either buying or issuing purchase tenders.
Most so far have bought Black Sea origins but some traders believed Saudi Arabia could turn to German wheat this time.
"I think German wheat will have a good chance in the Saudi tender while people are also expecting large wheat shipments to Iran from Germany this summer," one German trader said.
German cash wheat premiums were hardly changed with attention firmly focused on the upcoming harvest and both buying and selling interest weak.
Standard new crop wheat for delivery in Hamburg from September was offered for sale unchanged at 5 euros over the Paris November contract. Buyers were offering an unchanged 4 euros over Paris.
"Some rain is forecast in Germany in coming days which will be positive for our wheat crop but this could delay the start of the barley harvest which is expected in around a week," one German trader said. "Farmers are generally unwilling to sell at current low prices while flour mills are hoping the good crop forecast in much of Europe will depress prices and so they continue to delay purchasing."
The UK is expected to harvest around 15.5 to 16 million tonnes, near the 2008 record crop of 17.2 million tonnes, and well above the 11.9 million tonnes harvested last year.