Wheat firm on supply concerns, steady demand

PARIS/SINGAPORE: US and European wheat futures rallied on Wednesday to trade near three-month highs, supported by crop concerns in major northern hemisphere production belts and steady demand from importing countries.

Chicago soybeans steadied after sharp falls on Tuesday while corn inched down, as the market assessed the chances of beneficial rain in the Midwest in the coming days.

Grain markets also looked ahead to next week's US Department of Agriculture monthly supply and demand report for revisions to US corn and soybean yields and world wheat production.

The most-active wheat contract on the Chicago Board Of Trade (CBOT) was up 0.8% at $7.30-1/4 a bushel by 1219 GMT, to move back towards Monday's near three-month peak.

Jordan issues new tender to buy 120,000 tonnes of wheat

In Europe, benchmark December wheat on Euronext added 0.3% to 230.75 euros ($273.90) a tonne. It touched a three-month top on Tuesday before closing lower.

Wheat prices are underpinned by drought damage to spring wheat in North America, reduced forecasts for Russian production and quality concerns surrounding the European Union's harvest.

"Some consumers are baulking at higher prices for now. And that has few traders worried perhaps the gains have been too much, too soon," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Wheat set for second monthly gain as drought cuts US yields

"We are a little sceptical of that, the market is cutting wheat crop estimates."

While Egypt bought only one cargo in a wheat tender on Monday, other importing countries are seeking larger volumes.

Turkey provisionally booked 395,000 tonnes of wheat in a tender on Wednesday while Algeria is thought to have booked several cargoes in a tender earlier this week, traders said.

Pakistan on Tuesday issued a tender seeking 400,000 tonnes.

"The supply in the eight main (wheat) exporting countries will be revised downwards in the next USDA report," consultancy Agritel said, referring to the agency's monthly world outlook on Aug. 12.

CBOT soybeans added 0.2% to $13.22-1/2 a bushel while corn inched down 0.2% to $5.50-3/4 a bushel.

The corn market was supported by a poor second corn crop in Brazil after drought and frost damage.