Euronext wheat steadies after lows

PARIS, Aug 13 (Reuters) - Euronext wheat edged up on Wednesday to recover from contract lows, led by short-covering in front-month futures.

September wheat BL2U5 on Paris-based Euronext settled 0.9% higher at 194.50 euros ($227.70) a metric ton, after earlier equalling Tuesday's contract low of 192.50 euros.

December futures BL2Z5 ended 0.3% higher at 195.75 euros a ton, after setting a latest contract low at 194.25 euros.

Chicago wheat Wv1 also steadied after hitting another five-year low. GRA/

Monthly supply-and-demand projections from the U.S. Department of Agriculture on Tuesday, in which the USDA hiked its outlook for U.S. corn production, reinforced supply pressure in a grain market already absorbing large Northern Hemisphere harvests.

But impetus to close large short positions in Euronext September futures helped support the front month and narrow what had been a heavy price discount compared with December.

"Carry in the September/December MATIF (Euronext) spread is disappearing further as funds continue to exit the September contract," Donatas Jankauskas, analyst with commodity data firm CM Navigator, said.

The European market also drew support from talk of renewed interest in French wheat from importer Egypt against a backdrop of tight early-season availability in the Black Sea export zone, traders said.

There has already been talk this week of interest in German wheat to supply Algeria given limited Black Sea supplies.

In Germany, harvesting again progressed rapidly in sunny, dry weather on Wednesday following weeks of repeated rain which delayed work and likely caused quality damage.

“Quality varies greatly between regions, but it looks like opinion is focusing on the likelihood that about 30% of Germany’s wheat crop this year will only reach animal feed standard,” one German trader said.

Mostly dry weather forecast in coming days could allow wheat harvesting to be completed later next week, traders said.

"I think all of the feed wheat in this summer’s German crop will be sold inside Germany and that it will be pretty easy to sell,” another trader said. "This could reduce Germany’s import demand for corn.”

In France, where farmers are at the end of harvesting, the soft wheat crop was showing moderate protein levels but mostly strong test weights, farm office FranceAgriMer said in an initial assessment of milling quality.

($1 = 0.8542 euros)