US grain futures retreated from their highest prices in more than two months on Wednesday under pressure from advancing US harvests and profit-taking ahead of key crop reports. Declines in corn snapped a four-day rally that was fuelled by expectations the US Department of Agriculture will trim its production estimates in the monthly reports due on Friday.
The USDA will probably cut its projections for the country's average corn yield and for the number of acres of corn and soyabeans that will be harvested, according to a Reuters poll of analysts. However, "the fact remains that global grain supplies are large and do not look to be reduced drastically any time soon," said Kayla Burkhart, broker for CHS SunPrairie in North Dakota.
"There are some concerns that US production could not be as high as what the USDA has forecast but overall yields have been pleasantly surprising" for corn, she added. Chicago Board of Trade December corn dipped 0.6 percent to $3.95-3/4 a bushel after touching $3.99-3/4, the highest price for a front-month contract since July 24. The nearby contract has tumbled by almost 50 percent over the past three years due large harvests.
December wheat fell 1.8 percent to $5.16-3/4 after trading to $5.31-1/2, the highest price for a nearby contract since July 21. Profit-taking weighed on the market, which has recently been supported by concerns about dry weather in the Black Sea region, a major wheat exporter. But soyabeans bucked the weaker trend and advanced for the third consecutive day. November soyabeans gained 0.4 percent to $8.91-3/4. Commodity funds sold an estimated 6,000 corn contracts and 5,000 wheat contracts and bought 5,000 soyabean contracts.
The USDA is expected to raise its estimate for the average soyabean yield from September, with big harvests being reported in states including Iowa and Minnesota. The agency will reduce its estimate for US soyabean ending stocks to 414 million bushels from 450 million, according to the Reuters poll. Stocks probably need to drop below 400 million to extend the rally in soyabeans, traders said, noting that inventories above that level are considered to be comfortable.