Last update: Sun, 14 Feb 2016 03pm

US MIDDAY: wheat at three-month low

US wheat futures approached a three-month low on Tuesday and corn was little changed as traders took profits ahead of a government crop report. Soybean futures rose to a nearly three-month high, boosted by strong export demand. Traders were waiting for the US Department of Agriculture to update its outlook for global supply and demand in a monthly report due at 11 am CST (1700 GMT).

"The corn market is taking cue from lower wheat prices and is also experiencing some technical selling," said Kayla Burkhart, a broker for SunPrairie Grain.

"Soybeans, relative to other grains, to me look like they're a tad overpriced," she said.

Chicago Board of Trade December wheat stumbled 6-1/2 cents to $6.32-1/2 a bushel by 10:20 am CST (1620 GMT). That was the lowest level for a front-month contract since September 13. March corn was unchanged at $4.28-1/2 a bushel.

Forecasts for rising global wheat supplies weighed on grain prices, analysts said.

Analysts projected USDA will increase its estimate for global wheat inventories to 179.11 million tonnes from 178.48 million. US wheat ending stocks were seen slightly lower.

"We are seeing position-squaring ahead of the USDA report," said Andrew Woodhouse, grains analyst at Advance Trading Australasia.

The market is also focused on Southern Hemisphere production as the region moves into its crop-growing season. Favourable conditions in South America capped gains in soybeans, traders said.

Analysts polled by Reuters put Brazil's soy output at 88.7 million tonnes, versus the USDA estimate of 88 million, while production in Argentina is seen at 55.3 million tonnes, above the USDA estimate of 53.5 million.

"The reports from South America make it likely that the figures for the soybean crops there will be upwardly revised, while US ending stocks could be reduced as a result of buoyant US exports of soybeans and corn," Commerzbank said in a market note.

Copyright Reuters, 2013