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Wheat slips further as US crop forecast weighs

Wheat slips further as US crop forecast weighsPARIS/SINGAPORE: Chicago wheat eased for a third consecutive session on Friday to keep the market on course for a weekly fall after a bigger than expected official forecast of US wheat production kept the focus on ample supplies.

Soybeans also eased as attention remained on slowing demand in top importer China, despite a lower than anticipated US government forecast of US soybean stocks next season.

Corn also edged lower.

The most-active wheat contract on the Chicago Board Of Trade slipped 1.1 percent to $5.01 a bushel by the end of the overnight session, but held above the psychological $5 level it had touched on Thursday.

Soybeans were down 0.8 percent at $10.12-3/4 a bushel and corn was 0.8 percent lower at $3.98-3/4.

“Some investors may have decided that without another crop downgrade the rally in wheat prices has come to an end. We agree with that view,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

“The USDA is also forecasting a hefty rise in spring, durum and other high protein spring wheat production.”

The US Department of Agriculture projected the total US wheat crop for the 2018-19 marketing year at 1.821 billion bushels, above the average analyst estimate for 1.777 billion and up 5 percent from the prior year.

Winter wheat grown in the southern US Plains has struggled with months of drought, but the USDA said combined production of spring and durum wheat would increase 34 percent from the previous year.

The agency expects global wheat stocks to total around 264.33 million tonnes by the end of 2018-19 marketing year, only 2 percent below an all-time high of 270.46 million expected this season.

Soybean futures eased despite the USDA’s outlook calling for a sharp drop in US stocks, supported by increased demand.

“The optimistic USDA forecast of demand for US soybeans was countered by the Chinese Ministry of Agriculture reporting that 2018/19 will likely see the country reduce its soybean imports for the first time in 15 years,” Commerzbank analysts said.

Copyright Reuters, 2018

Source: Brecorder

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