GRAINS-Chicago wheat futures climb on supply worries, corn eases

PUBLISHED: Wed, 14 Jul 2021 02:42:08 GMT

* Lower wheat production forecast in top exporter Russia supports prices

* Dryness seen curbing U.S. spring wheat production

* Corn dips, losses curbed by expectation of drop in Brazil output (Recasts with move in wheat prices, adds details on Russian wheat output, fund positioning)

By Naveen Thukral

SINGAPORE, July 14 (Reuters) – Chicago wheat futures rose on Wednesday, with prices underpinned by a forecast of lower output in top supplier Russia and adverse weather hurting crops in the United States.

Corn and soybeans eased.

The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 0.2% to $6.35 a bushel, as of 0225 GMT.

Corn lost 0.4% to $5.38-1/2 a bushel and soybeans gave up 0.2% to $13.49-1/2 a bushel.

Russia’s Sovecon agriculture consultancy said on Tuesday it had downgraded its forecast for the country’s 2021 wheat crop by 2.3 million tonnes to 82.3 million tonnes after lower-than-expected yields at the start of harvesting.

Russia is the world’s largest wheat exporter, supplying mainly to Africa and the Middle East, with the European Union as its main competitor.

The U.S. Department of Agriculture (USDA), in a monthly report, slashed its harvest outlook for spring wheat, other than durum, by 41% year-on-year to 345 million bushels, putting it 25% below the average of analysts’ estimates.

The agency, in a separate weekly report, said 16% of the U.S. spring wheat crop was in good-or-excellent condition, down from 68% a year earlier and in line with forecasts.

Corn futures were also underpinned by optimism about export demand for U.S. supplies, given declines in the size of Brazil’s corn harvest. The USDA on Monday lowered its estimate of Brazil’s 2020/21 corn production to 93 million tonnes, from 98.5 million a month earlier.

Brokers were also considering whether the USDA might eventually lower its forecast of the U.S. 2021 corn yield from its current projection of 179.5 bushels per acre, signalling tighter supplies of new-crop corn.

U.S. soybean crushings likely dropped in June to the lowest in four months amid thinning supplies and scattered processor downtime, analysts said ahead of a National Oilseed Processors Association (NOPA) report due on Thursday.

NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 159.483 million bushels of soybeans in June, according to the average of estimates from 12 analysts.

However, China’s soybean imports in June rose 11.6% from May, customs data showed on Tuesday, continuing the trend of resurgent demand in the world’s top buyer as it strives to meet meal demand for its burgeoning hog herds.

China took in 10.72 million tonnes of soybeans in June, up from 9.61 million tonnes in May, and the third-highest monthly amount on record, data from the General Administration of Customs showed.

Commodity funds were net buyers of CBOT corn, soyoil and soybean futures contracts on Tuesday and net sellers of wheat and soymeal futures, traders said. (Reporting by Naveen Thukral; Editing by Subhranshu Sahu)

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