(Updates with afternoon trading)
PARIS, Dec 10 (Reuters) - European wheat futures fell to a one-month low on Monday, tracking a drop in Chicago prices as economic concerns and caution ahead of closely followed U.S. government grain forecasts overshadowed bullish fundamental news.
* U.S. grain futures were pressured by a higher dollar, slow exports and expectations Tuesday’s U.S. Department of Agriculture (USDA) monthly estimates will show a partial recovery in corn supply after this year’s drought-depleted harvest.
* On the Paris futures market, January milling wheat slipped by 1.75 euros or 0.65 percent to 267.00 euros ($350) a tonne by 1714 GMT.
* The contract earlier fell to 266.25 euros a tonne, a level last touched on Nov. 1.
* The subdued tone prevailed despite earlier weakness in the euro, linked to concerns over the planned resignation of Italian Prime Minister Mario Monti , as well as price-supportive demand and weather news.
* “Decent demand over the weekend, a drop in the euro, a possible cut in Argentina exports, a loss of area in the U.S. - all this is being put to one side in a very slow market that is awaiting the USDA report,” a futures dealer said.
* Import purchases by Iraq and Saudi Arabia showed healthy demand, and coupled with ongoing harvest problems in Argentina, offered the prospect of demand for exporting zones including the European Union.
* Argentina will allow only 4.5 million tonnes of wheat exports this campaign, against 6 million previously planned, in response to a rain-plagued harvest, a local newspaper reported.
* Another weather concern was the poor state of U.S. winter wheat crops, which recorded their worst-ever ratings during November and could leave fields vulnerable to winter conditions.
* Paris futures had risen on Friday, buoyed by a falling euro and the highest weekly volume of EU export licences in more than two years.
* In France, the farm ministry’s first area estimates for the next harvest put the winter wheat area 2.8 percent higher on last year but winter rapeseed sowings down 7.1 percent.
* Dry late-summer weather hampered rapeseed sowing, and a subsequent wet autumn has also delayed cereal sowing, although wheat was still expected to recover hectares lost to winter frost earlier this year.
* German wheat was hit by the drop in Paris but underpinned by the good export outlook and a firm feed wheat market, and prices continued to hold high premiums over Paris.
* Standard milling wheat for January delivery in Hamburg was offered for sale down 1 euro at 280 euros a tonne, with buyers at around 279 euros.
* “The good export outlook means that sellers are unwilling to drop prices in line with Paris and are demanding a premium of 13 euros over Paris, against 12 euros last week,” one trader said.
* “We seem to be in the main window of opportunity for west EU wheat exports, with competition from Russia and Ukraine fading and smaller Black Sea origins like Romania selling out.”
* “There is belief that a large proportion of the Saudi wheat purchase over the weekend could be placed in Germany as Saudi Arabia is a traditional German wheat customer.”
* Another trader said: “The weaker trend in the euro is a supportive factor today along with snow and freezing temperatures, which could disrupt some inland waterways shipping and rural trucking.”
* Continued demand and tight supplies kept German feed wheat around the same level or even above milling prices. Feed wheat for January delivery in the South Oldenburg market near the Netherlands was offered for sale unchanged at 282 euros a tonne with buyers around 280 euros. ($1 = 0.7736 euros) (Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; editing by Jane Baird)