EU wheat falls back as supply pressure lingers

PARIS, Aug 19 (Reuters) - Euronext wheat eased on Tuesday as short-covering in front-month futures abated while rising expectations for Russian production tempered reaction to a wave of French export sales.

September wheat BL2U5 on Paris-based Euronext settled 0.9% down at 194.50 euros ($226.71) a metric ton, retreating from a one-week high at 198.25 euros on Monday.

The front-month position has been supported by the closing of short positions, as well as demand for French wheat for nearby shipment, including a deal for at least 200,000 tons to Egypt.

However, improving harvest prospects in Russia after a disappointing start were maintaining supply pressure. On Monday, Russia's IKAR consultancy raised its 2025 wheat crop forecast.

December wheat BL2Z5, the most-active position on Euronext, ended 0.9% down at 193.75 euros a ton after setting a new contract low at 193.25 euros a ton.

"The trend is bearish and momentum (is) still negative," Donatas Jankauskas, analyst with commodity data firm CM Navigator, said of December futures.

There were nonetheless more signs of short-term demand for French wheat as exports in Russia remained curbed by slow farmer selling and also new regulations at one major port.

French traders said a large vessel was due at the Atlantic port of La Pallice to load wheat for Thailand while two smaller ships were scheduled to load wheat for Tunisia at the northern port of Rouen, confirming recent market talk.

“Normally you would expect the Black Sea, especially Russia, to supply Tunisian tenders at this time of the season,” a German trader said.

Russian 11.5% protein wheat for September shipment was around $237-$240 a ton FOB, about $2-$3 cheaper than French depending on exchange rates and Euronext moves. Ukrainian and Romanian wheat was around $2-3 a ton above Russian prices.

Russian 12.5% protein crop was around $239-$242, with demand around $235-$236.

In Germany, farmers' association DBV forecast the country's winter wheat crop will increase nearly 22% from last year’s poor harvest to 21.7 million tons, even after repeated summer rain damaged crop quality.

The association said much wheat would only reach animal-feed quality but that it could not give a national estimate. Most traders estimate about 30% of the crop as feed standard, less than feared.

“There is export demand from North Africa but it is hard for Germany to meet because of reduced farmer selling and wide-ranging quality,” another trader said.

($1 = 0.8579 euros)