Euronext wheat steadies as USDA report looms

PARIS/HAMBURG, Sept 11 (Reuters) - European wheat futures rose on Thursday to edge away from contract lows as traders adjusted positions before widely followed U.S. government crop forecasts on Friday.

December milling wheat BL2Z5 on Euronext was up 0.5% at 189.75 euros ($222.69) per metric ton by 1519 GMT, after almost reaching last Thursday's contract low of 188.00 euros.

Deferred delivery positions inched up after setting new contract lows.

Chicago wheat Wv1 also edged higher after hitting contract lows. GRA/

December is now the front-month position on Euronext after Wednesday's expiry of September futures at 170.50 euros. Data published by Euronext showed 11,450 tons of wheat had been physically delivered against the September contract.

Swelling global supply and falling prices in top exporter Russia have pressured wheat this week, though the run-up to the U.S. Department of Agriculture's monthly world supply-and-demand report has helped underpin the market.

"Friday's USDA (report) will be pivotal for short-term direction, but without a demand shock — particularly from China — any rallies are likely to be shallow and short-lived," British merchant ADM Agriculture said in a note.

Underscoring abundant supply, commodity research firm Expana said on Thursday it had raised its estimate of this year's soft wheat crop in the European Union to a record high.

Export prices in Russia have steadily eased, though import demand has remained tepid.

“Exporter demand is weak because of the expectation Russian prices will drop even more. I think there is an expectation that buyers will only reappear with more purchase tenders when Russian prices fall below $220 a ton FOB,” a German trader said.

($1 = 0.8521 euros)