HAMBURG/SINGAPORE: Chicago wheat, soybean and corn futures fell on Wednesday in a mood of risk-avoidance ahead of widely watched forecasts of world grain and oilseed supply and demand scheduled from the US Department of Agriculture (USDA) on Thursday.
Wheat was also weakened by improved weather forecasts for the US Plains and positive crop weather in some other producing regions, easing further from a six-week high hit on Monday.
Chicago Board of Trade most-active March wheat was down 0.6 percent at $4.24 a bushel at 1121 GMT, having closed down 0.3 percent on Tuesday.
March soybeans fell 0.2 percent to $10.11-1/4 a bushel and March corn fell 0.3 percent to $3.57 a bushel.
The USDA on Thursday will release a series of estimates including US quarterly grain stocks, US annual crop production, US winter wheat seeding and its monthly World Agricultural Supply and Demand Estimates (WASDE).
"Soybeans, wheat and corn are weaker today as people take risk off the table ahead of the USDA report on Thursday," said Graydon Chong, senior commodity analyst with Rabobank. "There will be a huge amount of data to digest from the USDA and although I do not think the market is expecting major surprises, some participants are taking a step back for the moment."
"I think markets will continue to drift until we know what the USDA brings. Investment funds are also rebalancing their portfolios which is also having an impact this week."
Expectations that the USDA reports on Thursday will show a sharp cutback in US winter wheat seedings kept declines in check.
The wheat market is also being weighed down by expectations of beneficial rains for crops across the US Plains which have been suffering from dryness.
"There are some better weather forecasts for wheat in the US with welcome moisture expected, which is also a weakening factor," Chong said. "Overall, US wheat seems to have come through the winter in reasonable state so far with enough snow cover to protect from cold."
"Black Sea region wheat also looks in a decent state, with conditions turning cold but with enough snow cover for protection."
In Ukraine and Russia, a substantial snow layer has protected winter crops from severe frosts which came this weekend, experts said on Tuesday.
"In soybeans, Argentina is facing more of a mixed bag with the market monitoring whether recent rain will cause the need for replantings regionally," Chong said. "But forecasts of dry weather in Argentina are weakening factors today."
Dry weather forecast for Argentina in coming days could help soybean and corn crops after heavy rains in late December and early January left 10 percent of its central farm belt with excessive moisture, Argentine observers said on Tuesday.
In other news, China has increased dumping tariffs on imports of the US animal feed ingredient derived from corn known as distillers' dried grains from levels first proposed last year, potentially escalating a trade spat between the world's two largest economies.
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