Wheat eases as USDA forecasts higher output

SINGAPORE — Chicago wheat futures slid for a second session on Monday, giving up some of last week’s gains as the US government forecast higher production.

Corn and soybeans lost ground on profit taking although concerns about crop-damaging hot and dry weather in the Midwest United States continued to underpin both markets.

US wheat supplies will be bigger than expected despite a snowstorm in early May that analysts worried had severely damaged the crop in Kansas, the top producing state, the US Department of Agriculture ( USDA) said on Friday.

The agency boosted its forecast for US winter wheat production to 1.250 billion bushels from 1.246 billion, and raised its yield projection in Kansas by two bushels per acre ( bpa) to 44 bpa.

The Chicago Board of Trade most- active wheat contract fell 0.60% to $4.43 a bushel by 0328 GMT, corn gave up 0.50% to $3.86 a bushel and soybeans fell 0.20% to $9.39-3/4 a bushel.

“US wheat market is facing harvest pressure and the crop looks bigger despite weather issues,” said Kaname Gokon of Tokyo brokerage Okato Shoji.

“Corn and soybeans will take direction from the weekly crop report due later.”

The wheat market jumped almost 4% last week supported by concerns that adverse weather would result in a lower protein content in the US winter wheat crop.

Prospects for low protein in the US harvest of hard red winter wheat have magnified the importance of spring wheat, a highprotein variety prized by millers for its quality.

For corn and soybeans, US Midwest weather will take center stage this week. Meteorologists predicted highs above 90˚ Fahrenheit (32˚ Celsius) across much of the Midwest early this week. The USDA on Friday said US soybean and corn ending stocks for the 2016/17 and 2017/18 crop years would be larger than analysts expected on average.

Large speculators trimmed their net-short position in Chicago Board of Trade corn futures in the week to June 6, regulatory data released on Friday showed.