EU wheat hits contract lows as USDA data adds to supply pressure

PARIS/HAMBURG, Aug 12 (Reuters) - Euronext wheat futures fell to contract lows on Tuesday, pressured by ongoing Northern Hemisphere harvests and a sharply increased U.S. corn crop forecast that reinforced expectations of ample global grain supply.

September wheat BL2U5 on the Paris-based Euronext settled 1% down at 192.75 euros ($225.13) a metric ton, after touching a contract low at 192.50 euros in late trade.

December futures BL2Z5, now the most active position on Euronext, ended down 1.3% at 195.25 euros a ton, after setting a contract low at 195.00 euros.

In monthly supply-and-demand projections, the U.S. Department of Agriculture hiked its outlook for this year's U.S. corn production and yield to record levels, surpassing market expectations.

The revisions pushed Chicago corn down to contract lows, dragging Chicago wheat to contract lows in its wake. GRA/

Adding to supply pressure in wheat, consultancy Sovecon said earlier 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.

The USDA kept its forecast of Russian production unchanged but raised its projection of European Union output to a four-year high. WASDE13

Losses on Euronext were limited by short-covering in front-month September futures, in which investors still hold a large open position, but dealers still saw limited price upside.

"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 recent rain damaged wheat quality.

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

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.

EU 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.

In oilseeds, November rapeseed COMX5 on Euronext fell as much as 3.5% to a four-month low as Canadian canola RSX5 dropped more than 6% after China announced an anti-dumping duty.

But Euronext pared losses to end 1.5% down at 466.50 euros a ton, helped by a bounce in U.S. soybeans following lower than anticipated USDA supply projections.

($1 = 0.8562 euros)