By Gus Trompiz and Michael Hogan
PARIS/HAMBURG (Reuters) - The risk of quality damage in this summer's German wheat harvest is increasing as rain soaks crops waiting to be cut, denting the European Union's export prospects after France's better-than-expected harvest results.
Germany is still expected to harvest a large volume of wheat, supporting an anticipated rise in EU wheat production this year.
But repeated rains are threatening to deteriorate grain quality that is crucial for overseas milling markets.
"There are clearly reasons to be worried about Germany. We don't know the impact yet but there is a quality risk," Sebastien Poncelet of consultancy Agritel said.
"France was fortunate in that it had an early harvest so it was able to gather a lot of crop with decent quality before the rains came."
The past fortnight has seen rain almost every day in Germany just as harvesting was starting, and there has been flooding in Lower Saxony, part of Germany's northern wheat export heartland.
Drier, brighter weather is forecast from Friday to Monday but some showers are still forecast in the north and widespread rain is seen returning next week.
"I am not a pessimist but the rain in the past two weeks on ripe wheat has caused damage in some areas," a German grains analyst said. "The damage is very regional and you cannot make national estimates of the impact yet."
Reduced crop quality could mar hopes Germany would pick up more export demand for higher-quality wheat due to weather damage to U.S. spring wheat. [GRA/EU]
"More feed wheat is expected this year as farmers cannot absorb the cost of drying machines and are leaving wheat in the fields in the hope of sunnier weather," the analyst said.
In France, the soft wheat harvest was 85 percent complete as of Monday and was running 12 days ahead of the average in the past five years, according to farm office FranceAgriMer.
Production estimates were converging around 36 million tonnes, up from last year's dire crop of just 28 million. Yields were mixed due to the impact of low rainfall and heatwaves but only Lorraine in the northeast was showing very poor levels.
Declines in test weights and Hagberg numbers, two measures of milling quality, following frequent rain this month, appeared moderate and localized, traders and analysts said.
In Britain, the EU's third-largest wheat grower, harvesting is underway although rain has slowed early progress.
"Some harvest activity has occurred in the south and east of the UK," said David Sheppard, managing director of UK merchant Gleadell.
Britain's wheat crop is expected to be little changed this year with an expected slight rise in yields offset by a decline in planted area.
The International Grains Council on Thursday forecast this year's crop at 14.4 million tonnes, unchanged from last year.
(Additional reporting by Nigel Hunt in London; Editing by Edmund Blair)