Can you make latte-art with a panarello wand?

Yes, you can. And it is not too easy.

Microfoam has small bubbles by definition and the panarello wand will draw a 'certain' amount of air and you can't really control that part. The notes below might help you get there. I have successfully done this with the panarello wands of automatic Saeco machines which aren't too different from deLonghi.

• Run your steam wand in a cup water first until it's fully producing steam and not spuddering hot water mixed with steam.
• Use a small Stainless Steel Milk Frothing Pitcher. If the wand is trying to blow steam and air in for a long time, you'll end up with big bubbles. That wand is not as powerful as a commercial espresso machine with a proper boiler.
• 'Stretch' the froth only for a few seconds in the beginning.
• Keep the wand off-center in the pitcher to encourage circulation (see next point).
• Most important: make sure you create a whirlpool to circulate the milk (helps to gently move the pitcher in a circular motion to encourage the start of the whirlpool).
• I use the fattiest milk I can find.

The trick is to move the milk in a circulation such that big bubbles break and only microbubbles survive. Some microfoam creation also happens at the vortex of the whirlpool.

I solved the problem by removing the outer "Panarello" wand and using the inner steam wand to stretch my milk, it gives you much more control and with a little practice it works a treat and produces nice glossy stretched milk perfect for latte art.