Chicago wheat futures fell half a percent on Friday on profit-taking amid thin trade ahead of a US Department of Agriculture report on global demand and supply. Wheat futures had jumped 4 percent in the last session on expectations of strong US exports and lower global production. Soybeans lost more ground, while corn was little changed.
"It is little bit position squaring and profit taking before the report," said Adam Davis, a senior commodity analyst at Merricks Capital, a Melbourne-based funds manager that invests in agriculture. "Given the strong run overnight, it is not unusual to see prices come off a few cents." Chicago Board of Trade front-month September wheat fell 0.5 percent to $7.03 a bushel by 0234 GMT and was down 0.9 percent to $7.31-3/4 a bushel for December.
The CBOT December corn contract lost 0.1 percent to $4.70-1/2 a bushel. For the week, front-month wheat is down 0.7 percent after rising 7 percent last week, while corn has added 1.3 percent following a 6.8 percent rally a week ago. The USDA is expected to show a downward revision in US corn output and may show another decline in world wheat production in its monthly report due to 1230 GMT.
The USDA was seen trimming its forecast of world wheat production to 641.44 million tonnes from its August estimate of 645.73 million. A Reuters poll showed traders and analysts were expecting the USDA to peg corn yields at 162.869 bushels per acre, down from its August estimate of 165 bushels. The soy yield was seen at 43.623 bushels, down from 44. Analysts said grain markets have already priced in a lower output and rates are unlikely to climb unless the numbers were even lower than expected.
"It will take a significant drop in estimated yields to push the market higher given how much has already been priced in," said Davis. "A minor decrease in yields may be neutral or even bearish for the market." Still, renewed concerns arising from a weather-related threat to Canada's wheat crops is supporting prices. Canada is one of the top five global exporters of wheat and the biggest producer and exporter of top quality milling spring wheat. Excessive wet weather had already trimmed Canada's wheat output and quality this year and harvest is running well behind average, leaving the crop vulnerable to harm, the Saskatchewan government said.
Enviro Canada said temperatures were expected to dip close to freezing over the weekend and the Canadian Wheat Board on Tuesday said the first widespread frost may occur on Monday and Tuesday, especially in Alberta. Soybeans futures fell for a second day, after a broad-based sell-off in China's commodity markets linked to talks of a probe into the domestic rubber market pulled down prices on Thursday. CBOT new-crop November soybeans fell 0.5 percent to $10.41 a bushel.
China, the world's largest soy buyer, imported 4.77 million tonnes of the oilseed in August, down 3.6 percent from July, according to Reuters' calculation based on official Customs figures. Imports are likely to slow in coming months because of negative crushing margins in summer after large imports over the past two months. The China National Grain and Oils Information Centre estimated October imports could be as low as 3 million tonnes.