Euronext wheat regains ground before USDA data

PARIS, Sept 12 (Reuters) - European wheat futures edged higher on Friday, moving away from contract lows as traders awaited a U.S. government crop report later in the day for a crucial indication of U.S. grain supply.

December milling wheat BL2Z5 on Euronext was up 0.4% at 190.25 euros ($222.97) per metric ton by 1457 GMT.

On Thursday the benchmark position had almost equalled a contract low of 188.00 euros struck last week, before closing slightly higher.

The run-up to the U.S. Department of Agriculture's monthly world supply-and-demand report, due at 1600 GMT, has encouraged wheat markets to consolidate after they were pressured this week by swelling global supply and falling prices in the world's biggest exporter Russia.

The USDA's September report is being watched in particular for updated U.S. corn and soybean harvest estimates, after a dry August and crop disease led grain markets to anticipate downward yield revisions.

"Yield cuts for U.S. corn and soybeans now appear largely priced in, meaning it would take either significant revisions or no revisions at all to truly surprise the market," commodity data firm CM Navigator said in a note.

Wheat is influenced by corn as the cereals partly compete for demand in livestock feed.

The USDA's wheat outlook was expected to confirm abundant global supply.

The wheat market continued to assess price competition amongst exporting countries amid tepid demand from importers, with traders noting the decline in Russian prices remained moderate so far.

“Demand is staying weak with hardly any new wheat purchase tenders issued this week. With Euronext also weak this week and more estimates of a big Russian crop, the bears are expecting Russian wheat to fall below $220 a ton,” one German trader said.

Russian 12.5% protein September wheat was on Friday around $224-$226 a ton FOB. Russian 11.5% protein wheat was around $221 to $223 a ton FOB

French wheat was about $2 more expensive depending on Euronext and currency moves, with Ukrainian wheat about $3 and Romanian about $5 over Russian, he said.

Traders reported buying interest from Egypt this week for Black Sea supply, with buyers seeking to pay around $246 a ton cost and freight (c&f) for September/October shipment of Ukrainian 11.5% protein wheat.

They were cautious, though, about a Bloomberg report of large purchases of Black Sea wheat by Egypt’s state buyer, with most seeing a tally of purchases in recent months rather than new business.

($1 = 0.8532 euros)