PARIS/SYDNEY: Chicago corn futures were flat on Thursday as traders readied for a widely watched US government report for clues as to how much US crops have suffered from dry conditions.
Soybeans edged higher, underpinned by forecasts suggesting parts of the Midwest grain belt may only see limited rain, while wheat inched down in adjustments before the US Department of Agriculture's (USDA) monthly supply-demand report at 1600 GMT.
The most active corn futures on the Chicago Board Of Trade were unchanged on the day at $3.86-1/4 a bushel by 1134 GMT, having gained 0.7 percent in the previous session.
The USDA's August report is closely followed as it contains the agency's first assessment of the 2017 corn crop based on field surveys.
Analysts on average expect the USDA to lower its estimate for US corn production to 166 bushels per acre (bpa) from 170.7 bpa to reflect the impact of dryness.
"The market is looking for the USDA to cut corn supply estimates in tonight's report. Should it match those expectations, then that might provide the market some support," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.
"Nonetheless, the USDA report on this occasion is likely to be seen as a minor skirmish in a larger battle. US Midwest weather is that larger battle."
Some analysts and traders anticipate the USDA will make a limited yield cut at this stage and that could prompt the market to shift its focus back to the weather outlook.
Analysts also expect the USDA to trim its US soybean yield forecast, to 47.5 bpa from its current trend-based projection of 48.0 bpa.
Investors have been grappling with varying rainfall this summer which has left some zones parched but others wet.
Remote vegetation charts suggested an improvement in corn and soybean crops, Thomson Reuters Agriculture Research analysts said in a note.
"Concerns remain, however, for western Iowa and central Illinois's corn and soybean yields as the heavy production regions may continue to miss out on rainfall," they said.
The most active CBOT soybean futures were up 0.5 percent at $9.78-1/4 a bushel, while wheat was down 0.3 percent at $4.58-1/4 a bushel.
Wheat prices continued to be capped by ample global supplies that are expected to cushion the impact of lower US production.
Analyst firm Strategie Grains raised its monthly estimate of 2017 common wheat harvest production in the European Union, citing strong results in southeast Europe that were offsetting rain impact in countries such as Germany.
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