EU wheat reverses gains after bearish USDA data

MADRID, Feb 23 (Reuters) – European benchmark wheat prices turned lower in afternoon trade on Thursday as surprisingly high forecasts for U.S. plantings prompted selling. * Crop weather uncertainties, firm export demand and technical price support helped limit losses. * The U.S. Department of Agriculture estimated total wheat plantings this year would be 58 million acres, up 3.6 million acres from 2011. * “For me it’s bearish,” one futures dealer said of the USDA data. “I can see us falling but it won’t be a rout either. There is still a weather market playing out.” * May milling wheat, The most actively traded contract on the Euronext exchange in Paris, was down 1.25 euros, or 0.61 percent, to 204.75 euros ($271.12) a tonne by 1631 GMT. * The contract was testing key support at 205 euros which held up as a floor during a sharp fall on Tuesday. * Raised estimates for global wheat and maize production from the International Grains Council also reinforced the prospect of growing worldwide supply. * The contract retained key support at 205 euros, which held during a sharp fall on Tuesday. * The European Union granted export licences this week for 299,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 8.7 million tonnes, official data showed on Thursday. * Dealers were watching out for the results of wheat purchase tenders from Algeria on Thursday, which could give some guidance to how competitive European wheat is after a surge by the euro. * No origin emerged as a clear winner in a Tunisian tender for 50,000 tonnes of wheat on Thursday. * Dealers say Morocco could buy more grain if it extends zero duties on wheat beyond the end of February in response to poor crop weather which could damage its forthcoming harvest. SPAIN * Spanish physical wheat was little changed as consumers were reluctant to buy at current prices and less merchandise than expected had arrived in the major importing country under the EU’s tariff-rate quota scheme. * “Normally this is the month when new crop begins to be sold during a lull in old crop dealing, but right now we don’t even have that,” a dealer said. * Dealers in Europe and the United States said at least 85,000 tonnes of U.S. wheat was bound for Spain, following reports that recent sales had been clinched for up to 200,000 tonnes. * Spain bought a 30,000 tonne cargo of U.S. soft red winter wheat from Louis Dreyfus for about $286 per tonne, including cost and freight, a U.S. trader said on Wednesday. * A European trader said Bunge had chartered an additional 55,000 tonnes of U.S. wheat for Spain. * Prompt feed wheat in leading grains port Tarragona was quoted flat over Wednesday at 221-223 euros/tonne with deals heard at 219 euros. Dealers said quotes could vary by 2 euros a tonne due to recent exchange rate volatility. * “Some European feed ingredient buyers, especially in Spain, are finding corn more attractive and are also expecting a thaw in Black Sea and Azov ports in the near future, which could bring a higher flow of exports from the region,” a German trader said. GERMANY * German wheat gave up earlier gains and dropped in line with the fall in Paris and Chicago. * Standard quality milling wheat for March delivery in Hamburg was offered for sale down one euro at 212 euros a tonne with buyers at around 210 euros. * “Demand for wheat from mills remains restrained because of poor milling profit margins. There is some exporter demand but the rise in the euro today is not encouraging,” a trader said. * Demand from animal feed producers kept German feed wheat prices close to milling wheat in parts of the country, a pattern seen in past weeks. * Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale at 214 euros a tonne, with buyers at around 212 euros. * Traders were disappointed German wheat was apparently side-stepped as Iran bought a total 800,000 tonnes this week from Russia and Australia following large German sales to Iran in past weeks. * “If Russian banks are providing finance for Iranian grain imports, Russian wheat would have the advantage,” a dealer said. * Deep frosts this month have caused some canals and rivers to freeze up and disrupt transport but warmer weather could help to free up inland waterways in coming days. * Prices at 1625 GMT Product Last Change Pct Move End 2011 Ytd Pct Paris wheat 204.50 -1.50 -0.73 195.25 4.74 London wheat 166.00 -0.50 -0.30 153.65 8.04 Paris maize 206.75 -0.50 -0.24 197.25 4.82 Paris rape 440.00 0.00 +0.00 421.50 4.39 CBOT wheat 637.00 -8.75 -1.36 671.25 -5.10 CBOT corn 639.25 -2.00 -0.31 654.75 -2.37 CBOT soybeans 1283.50 4.75 +0.37 1207.75 6.27 Crude oil 106.24 -0.04 -0.04 98.83 7.50 Euro/dlr 1.33 0.01 +0.54 1.30 2.77 * All grain and oilseed prices for second position. Paris futures prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel. 204.75($1 = 0.7552 euros) (Reporting by Martin Roberts in Madrid, Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Anthony Barker)