Euronext wheat rebound stalls as export worries linger

PARIS, May 16 (Reuters) - Euronext wheat edged down on Friday as a rebound from contract lows stalled with pressure from a fall in Chicago and lingering concerns about lagging export demand.

September milling wheat BL2U5 was down 0.7% at 204.50 euros a metric ton by 1455 GMT. It earlier rose to a one-week high of 207.00 euros as it moved away from Tuesday's contract low of 201.00 euros.

Chicago wheat Wv1 also fell. GRA/

Despite an upturn in international demand and concerns about dry crop conditions in China and northern Europe, traders said broadly favourable Northern Hemisphere harvest prospects and stiff export competition remained a drag on prices.

"The market looks like it needs a crop failure somewhere," a futures dealer said. "If crops continue to be in decent shape, Euronext risks falling further by the summer harvest."

In France, ratings for soft wheat declined slightly last week, though they remained well above last year's rain-hit level, data from farm office FranceAgriMer showed.

On the demand side, traders were awaiting the outcome of an import tender being held by Saudi Arabia, though like in an Algerian tender on Wednesday Black Sea supplies including Russian wheat were expected to be offered aggressively.

“Russian wheat sellers have become more active and market expectations are that Russia’s May wheat exports will reach around 2 million tons," a German trader said, adding that cheap U.S. wheat was also looking competitive for North African and Middle Eastern markets.

“Against this background, some are asking how long Euronext can hold the 200 euro level and if 180 euros could be the next Euronext support level unless there is help from a weaker euro.”

In Poland, farmers were reluctant sellers because of dry conditions in the north.

Polish 12.5% protein wheat rose around 10 zloty in the past week to around 930 zloty a ton (218 euros) for May/June delivery to ports.

“Some exporters have been seeking to cover short positions in Polish wheat but are struggling to buy substantial quantities for export, since farmers are unwilling sellers due to dry weather and worry about late frosts possibly damaging spring sown corn,” a Polish trader said.

Ships loading wheat in Gdansk/Gdynia include vessels taking on 30,000 tons for Morocco, 35,000 tons for Ghana, 35,000 for an undisclosed west African port and 30,000 tons for another unknown destination. One vessel has just left Szczecin with 32,000 tons for Congo.