EU wheat draws support from strong Russian prices

PARIS/HAMBURG, Aug 26 (Reuters) - European wheat held steady on Tuesday, as firm prices in Russia, its main competitor on the export market, offset the bearish impact of ample supplies and a rise in the euro EUR=.

December wheat BL2Z5, the most-active contract on the Paris-based Euronext exchange, was up 0.1% at 195.75 euros ($229.16) a metric ton by 1545 GMT.

Front-month September wheat BL2U5, which expires on September 10, was also 0.1% higher at 195.25 euros a ton.

"Markets are still waiting for a more substantial fall in Russian wheat prices, which remain stubbornly firm despite arrivals of Russia’s new crop in large volumes," one German trader said.

The trader said Russian export prices began the week hardly changed, "at best marginally weaker".

International import demand was also thin with hardly any new purchase tenders issued. GRA/TEND

Russian prices have been supported in recent weeks by a lack of farmer selling because of dissatisfaction with the prices on offer.

Russian 12.5% protein September wheat was on Tuesday around $235-$238 a ton FOB, hardly changed on last week, but importer demand was much lower at around $231 a ton FOB.

Russian 11.5% protein wheat was around $232-$235 a ton FOB, around the same as French and about $4-$5 cheaper than Ukrainian and Romanian.

German farmers were unwilling sellers of this year’s large harvest that suffered late quality damage from rain, with around 25%-30% only reaching animal feed standard.

"German farmers are still sorting and grading their crop and are often cautious about selling in case they cannot deliver the quality," another trader said.

He also said a large volume of milling wheat was still available and there were good protein levels in some of the east German new crop wheat.

($1 = 0.8542 euros)