France has, for a second time, raised its forecast for this year's soft wheat crop, helping send prices in London to a 2009 low and in Paris to a contract low.

The country's farm ministry pegged the soft wheat harvest at 37.2m tonnes, 1.22m tonnes higher than last month's forecast and up 1.55m tonnes from its July estimate.

The ministry also edged its forecast for rapeseed production higher by 180,000 tonnes to a record 5.49m tonnes and, in its first estimate for sugar beet production, predicted a 32.3m-tonne harvest, up 1.95m tonnes on last year.

Buyers wait out

The report, coupled with weak Chicago wheat, added to the pressure on Euronext prices. Paris milling wheat for November setting a new contract low of E122.25 a tonne before recovering to E123.00 a tonne, down E0.75 on the day.

The contract topped E220 a tonne in its opening days in March 2008.

London's November feed wheat contract lost £1.20 to £93.00 a tonne, a level not seen for a near-term contract since December last year.

"The data is not exactly unexpected – it became clear as harvest progressed that things were going pretty well - but it shows what wheat prices are up against," a London trader told Agrimoney.com.

"What we are hearing is a lack of demand relative to supply as consumers sit on their hands waiting for prices to go down further."

Agritel, the French consultancy, added that investors' confidence had been damaged by a fall in Paris wheat below a support level of E125 a tonne, potentially leading to further declines ahead of the US Department of Agriculture's latest global crop report on Friday, a key event in the farm commodity diary.

Harvest trend

France is the latest of a string of European producers to raise 2009 forecasts, with the Czech Republic on Tuesday pegging grain output at 6.99m tonnes, 270,000 tonnes higher than its July forecast.

On Monday, Moscow-based analysis group SovEcon raised hopes for Russia's grain production.

Last week, Danish farming newspaper Landbrugsavisen said Denmark was on course for a record grain harvest of 9.8m tonnes, beating the 9.6m tonnes reaped in 1990.

Landbrugsavisen, whose forecast was based on a poll of farm consultants, pegged Denmark's average harvest at 8.8m tonnes.

And Finland forecast a 4.4m-tonne grain harvest, up 160,000 tonnes year on year, helped by record spring wheat production.

"During the 2009 growing season, average heat and moisture have been suitable for crop development," Finland's Ministry of Agriculture and Forestry said.

"The grain harvest is expected to be good in terms of both quantity and quality. However, threshing has only just begun, and the situation could still change."