EU wheat back at contract lows before USDA data

PARIS/HAMBURG, Aug 12 (Reuters) - Euronext wheat futures eased to trade around contract lows on Tuesday, pressured by ongoing Northern Hemisphere harvests and expectations that U.S. government forecasts will show ample global supply.

September wheat BL2U5 on the Paris-based Euronext was down 0.3% at 194.25 euros a metric ton by 1531 GMT, near a contract low of 192.75 euros from early July. December futures BL2Z5 were down 1.0% at 195.75 euros a ton, after setting a new contract low at 195.50 euros.

Supply pressure persisted before monthly U.S. Department of Agriculture supply-and-demand projections later on Tuesday.

Consultancy Sovecon said on Tuesday it had raised its forecast for Russia's wheat crop in 2025 to 85.2 million metric tons, up from 83.3 million previously, to add to market expectations that the harvest in the world's top wheat exporter will recover from a poor start.

September futures last week found support in short-covering by investors, but dealers still saw limited upside on Euronext.

"Each time the market rises, the funds revert to selling," a dealer said. "There was some farmer selling yesterday, which also pressured physical premiums."

In Germany, hot, sunny weather meant the harvest made good progress, with possibly about 50% finished but with growing belief that preceding weeks of rain have damaged wheat quality.

“I think there is general belief that about a third of Germany’s harvest will only reach animal feed standard this year,” one German trader said.

“This volume can be sold inside Germany and would be removed from the export surplus, which anyway will not be missed as the Black Sea is likely to cover the main export demand in coming months.”

At the same time, slow farmer selling was underpinning Russian prices and sustaining interest in other origins, with the trader citing talk of demand for German wheat to supply Algeria.

Russian 12.5% protein September wheat was around $240-$243 a ton FOB, Russian 11.5% protein wheat was around $237-$238 a ton FOB, with some buyers ready to accept firm Russian prices, traders said.

European Union data showed the bloc's soft wheat exports were down 56% so far this season, but the absence of any figures for France was affecting the data.