PARIS/SINGAPORE: Chicago wheat futures eased for a second straight session on Monday as upwardly revised US government forecasts for US and world wheat production encouraged investors to book profits after a rally last week.
Corn and soybeans also lost ground as forecasts pointing to rainfall in the Midwest this week countered concerns about sweltering temperatures that had pushed prices higher on Friday.
The Chicago Board of Trade most-active wheat contract was down 1.4 percent at $4.39-1/2 a bushel by 1115 GMT. Corn dropped 1 percent to $3.83-3/4 a bushel and soybeans were 0.4 percent lower at $9.37-3/4.
US wheat supplies will be bigger than expected despite a snowstorm in early May that analysts worried had severely damaged the crop in Kansas, the top producing state, the US Department of Agriculture (USDA) said on Friday.
The agency also increased its outlook for this year's wheat harvest in Russia, where some crops have faced chilly, wet spring weather, contributing to an upgrade to projected global wheat output and inventories.
"Overall, the USDA now expects the renewed surplus on the (world) wheat market to total 4.8 million tons, which is somewhat higher than before. This is pressuring the US wheat price this morning, which had been pulled up last week by the lack of high-quality wheat," Commerzbank analysts said in a note.
The increased production outlook also put the focus back on new-crop supplies that are set to roll in from the US harvest that is under way in southern states.
The wheat market jumped almost 4 percent last week, supported by concerns that adverse weather would result in lower protein content in the US winter wheat crop, and reduce yields of high-protein spring wheat in the northern US Plains.
Corn and soybeans also faced some supply pressure from Friday's USDA report, in which the agency said US soybean and corn ending stocks for the 2016/17 and 2017/18 crop years would be larger than analysts were expecting on average.
But weather remained the main focus for corn and soybean markets, with traders watching to see if rain would offset the impact of high temperatures this week.
"Confidence building on expected rainfall east of the Mississippi River, but corn and soybeans in the Plains and western Midwest look to miss out," Thomson Reuters Agriculture Research analysts said in an update on Monday.
The USDA's weekly crop progress report, released at 2000 GMT, will be scrutinised for any sign of weather stress. Last week's publication contributed to the rally in wheat prices by indicating a sharp decline in spring wheat crop conditions.
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