EU wheat stuck at lows as Russian supply weighs

PARIS/HAMBURG, Sept 10 (Reuters) - Euronext wheat futures were little changed on Wednesday, holding around contract lows as more signs of growing supply and falling prices in top exporter Russia kept the market under pressure.

December milling wheat BL2Z5 on Euronext settled unchanged on the day at 188.75 euros ($220.95) per metric ton, hovering near Thursday's contract low of 188.00 euros that marked an 18-month trough for a second-month price BL2c2.

Deferred delivery positions set new contract lows.

Consultancies IKAR and Sovecon each said on Wednesday they had further increased their estimates for Russia's wheat harvest to around 87 million tons, reinforcing expectations of a bigger crop than last year.

"There's probably more to come," one futures dealer said of Russian crop estimates. "There continue to be good yields for spring wheat."

Export prices in Russia have steadily eased as some farmers stepped up harvest sales after holding back during the summer.

At the same time, international demand remained thin. GRA/TEND

“Russian prices are weaker but still not falling sharply. Some importers are still expecting Russian 12.5% wheat prices to fall to the $220 level and are delaying purchases,” a German trader said.

Russian 12.5% protein September/October wheat was on Wednesday around $224-$226 a ton free on board. Russian 11.5% protein wheat was around $221 to $223 a ton FOB.

Falling Russian prices have cooled demand for western European wheat after a brief flurry this summer, though traders said there was still potential for more feed wheat sales to Asia.

Euronext was nonetheless underpinned by chart support, slow farmer selling and caution among investors with large short positions, dealers said.

Traders were also waiting for Wednesday's expiry of front-month September futures. The position ended its final session at 170.50 euros.

Grain markets are at the same time seeking fresh impetus from Friday's U.S. Department of Agriculture monthly supply-and-demand report, closely watched for U.S. harvest estimates.

($1 = 0.8543 euros)