EU wheat steadies after slide on US crop ratings surprise

PARIS, May 28 (Reuters) - Euronext wheat rose on Wednesday in step with Chicago futures, as lower than expected U.S. crop ratings helped prices steady after a day-earlier slide, though favourable overall harvest prospects and slow export demand limited gains.

September milling wheat BL2U5, the most active position on Paris-based Euronext, was up 0.4% at 202.00 euros a metric ton by 1420 GMT. On Tuesday it had equaled a contract low of 201.00 euros from May 13 but, as previously, it held above the 200 euro psychological threshold.

Volumes were light, with some market participants heading off for a long weekend in view of Thursday's Ascension Day holiday in some European countries.

Chicago wheat futures Wv1 also regained some ground after dropping 2.6% on Tuesday.

The U.S. Department of Agriculture, in a report released after Tuesday's close in Chicago, rated 50% of the U.S. winter wheat crop as good to excellent, down 2 points from a week earlier and below the average analyst forecast. In its first rating this year for spring wheat, it gave a good/excellent score that was below the lowest in a range of analyst expectations.

"The market is recovering slightly with the U.S. crop ratings," a futures dealer said. "But we know that ratings tend to decline in the run-up to harvesting. At the same time, demand is sluggish, with China absent and India seemingly not needing to import."

The USDA's rating for winter wheat remained the highest in five years for the time of year and with harvesting under way in Texas traders were anticipating supply pressure will build. GRA/

In Europe, rain relief forecast in northern Europe since last week has also tempered worries about the harvest outlook.

In Germany, the country's association of farm cooperatives in its latest harvest estimate on Wednesday pegged the 2025 wheat crop at 21.01 million metric tons, down from its April forecast of 21.41 million tons but up 13.6% from last year.

“It is disappointing that the forecast was cut by around 400,000 tons, but overall the expectations are still for a decent-sized crop,” one German trader said. “Frankly, with a big Black Sea crop approaching, the world will not need much German wheat anyway.”