Euronext wheat rises on short-covering and Chicago rebound

PARIS/HAMBURG, Aug 7 (Reuters) - Euronext wheat rose on Thursday, boosted by short-covering in front-month futures and spillover from an export-fuelled rebound in Chicago.

September wheat BL2U5 on Euronext settled 1.9% higher at 197.50 euros ($229.81) a metric ton, after approaching a contract low earlier this week.

December wheat BL2Z5 ended 1.6% up at 201.50 euros a ton, recovering from a contract low of 197.50 euros on Wednesday.

A large short position held by investors has prompted short-covering in September futures in the run-up to the expiry of options next week, according to dealers.

Chicago wheat Wv1 rallied around 2% to rebound from a five-year low, encouraged by higher than expected weekly U.S. export sales that countered supply pressure from Northern Hemisphere harvests. GRA/

"U.S. wheat is very competitive during this first phase of the new marketing year and American exports are buoyant," commodity data firm Expana said in a report.

The firm, which has acquired consultancy Strategie Grains, increased its estimate of the European Union's ongoing wheat harvest while raising its outlook for EU wheat exports.

However, it lowered its EU maize crop forecast for a second month due to harsh weather in southeast Europe.

The reduced forecast coupled with high temperatures forecast for southern French maize belts supported Euronext maize futures, along with a rebound in Chicago prices Cv1, dealers said.

November maize EMAX5 on Euronext ended 2.1% higher at 192.50 euros a ton.

Warm weather should let wheat harvesting accelerate in northern Europe after rain delays since late July that have threatened to spoil grain quality.

Germany’s wheat harvest is resuming on a wide scale while Denmark’s harvest is likely to restart over the weekend.

“It seems certain that rain in past weeks has caused quality damage,” one German trader said.

“So little German wheat has been harvested so far that you really cannot make a realistic assessment, but Germany is likely to harvest more feed wheat than hoped.”

There was market talk that rain delays have prevented exporters in the Baltic States from purchasing enough wheat for August exports, potentially leading to loadings being transferred to France.

An increased amount of feed-grade wheat was generating demand. An Irish Republic importer was seeking to buy 7,000 tons of feed wheat for October shipment at premiums of around 5-6 euros cost and freight included (c&f) over Euronext December.

($1 = 0.8594 euros)