EU wheat pushed up by surge in U.S. soybeans

HAMBURG, Aug 27 (Reuters) - European wheat markets were supported on Monday by a rise in U.S. soybean futures to new contract highs coupled with hopes Europe will receive more export demand in coming months, traders said.

* Europe's benchmark wheat, the Paris November contract , was up 0.19 percent or 0.50 euros at 260.75 euros a tonne at 1140 GMT.

* U.S. soybeans hit new contract highs on Monday after a key tour of experts by the Pro Farmer team concluded the drought damage to the U.S. soybean crop is worse than government forecasts.

* "I think the rise in soybeans after the Pro Farmer crop tour estimates on Friday is leading the European wheat market higher," said Rory Deverell of Intl FCStone Europe.

* "Pro farmer sees the U.S. yields below USDA and also lower cropping area. There could be background support from some very serious wheat quality concerns in Britain, where there is also severe loss of yield in some cases."

* Traders said the outlook for global soybean supplies is tight, with little alternative open to buyers apart from competing to buy the drought-reduced U.S. supplies.

* "The world will be largely dependent on the U.S. soybean crop until the new South American soybean harvest in early 2013," one trader said. "I think a lot of focus is on soybeans futures today, if soybeans remain strong in coming months, wheat prices are also likely to stay well supported."

* Despite fears drought damage may cut Black Sea export supplies, Egypt bought Russian and Romanian wheat in a snap purchase tender on Saturday.

* "It could be viewed as bearish that Russian wheat was offered so extensively to Egypt in the tender on Saturday," another trader said. "But the other side of the coin is that Russian wheat export supplies could be sold out quickly, perhaps by the end of this year, if Russian export sales carry on at this speed."

* Russian Deputy Prime Minister Arkady Dvorkovich, who coordinates farm policy, will discuss prospects for the drought-hit grain harvest with Agriculture Minister Nikolai Fyodorov on Friday.

* Russia's government recently cut its 2012 grain crop forecast to 75 million tonnes, but has sought to reassure markets that there would be no repeat of the decision in Aug. 2010 to ban grain exports due to a failed harvest that year.

* "French wheat was offered in the Egyptian tender on Saturday at around $30 a tonne under U.S. wheat bids," a trader said. "This shows EU wheat will be next in line to fill export demand as Russian supplies sell out."

GERMANY

* German prices were catching up with falls in Paris late on Friday, with belief hardening that Germany has gathered a good harvest of satisfactory quality also a weakening factor.

* Standard milling wheat for September delivery in Hamburg was offered for sale down 3 euros at 266 euros a tonne with buyers at around 265 euros.

* "We are still holding about 5 euros over Paris," one dealer said. "The weekend weather was rainy and cool so the final stages of the wheat harvest are not quite finished but should be in the next couple of days."

* "I think most people now believe Germany has managed to achieve a good harvest of satisfactory quality after a lot of worries about late rain damage."

* Germany's own harvest outlook changed greatly after a burst of sunshine in past weeks enabled very fast progress to be made after repeated rain had delayed the harvest start.

* Germany will harvest 22.8 million tonnes of wheat this year, slightly up on the 2011 crop of 22.7 million tonnes, Germany's leading grain trading house Toepfer International said on Thursday.

* "The market remains well supported by the U.S. and Russian crop worries and the likelihood of more export demand being switched to Germany and France," a trader said. "There is also talk the British crop is not as good as reported."

* "Several other small players such as Serbia and Croatia are also thought to have had poor crops which will take export supplies out of the international supply balance." * Prices at 1140 GMT

 Product             Last    Change   Pct Move End
 2011 Ytd Pct 
 
  Paris wheat         259.00     1.00    +0.39  
 195.25    32.65
 
  Paris maize         257.75     2.00    +0.78  
 197.25    30.67
  Paris rape          522.00     2.25    +0.43  
 421.50    23.84
  CBOT wheat          866.25    -1.25    -0.14  
 671.25    29.05
  CBOT corn          811.25     2.75    +0.34   654.75
    23.90
  CBOT soybeans      1747.75    16.25    +0.94 
 1207.75    44.71
  Crude oil           96.94     0.79    +0.82    98.83
    -1.91
  Euro/dlr              1.2524
 * All grain and oilseed prices for second position.
 Paris futures prices in Euros per tonne and CBOT in
 cents per bushel.
 
 
 (Reporting by Michael Hogan; editing by James Jukwey)