PARIS/SINGAPORE: Chicago soybean and corn futures edged higher on Friday as markets took a breather but were poised for a third straight weekly fall after higher than expected US government crop forecasts triggered a sell-off in the previous session.
Wheat inched down to stay on course for a fifth weekly loss in a row, after the US Department of Agriculture (USDA) reduced weather-hit US wheat supply by less than anticipated and hiked production in the Black Sea export region.
The Chicago Board of Trade most-active corn contract was up 0.2 percent at $3.71-3/4 a bushel by 1214 GMT, after sinking on Thursday to its lowest since June 30 at $3.70-1/4.
CBOT soybeans edged up 0.5 percent to $9.45 a bushel, after also touching its lowest since June at $9.37 earlier on Friday.
CBOT wheat was down 0.2 percent at $4.39-3/4, after earlier touching its weakest level since mid-June at $4.38.
The USDA on Thursday projected the US corn yield at 169.5 bushels per acre (bpa), below its previous forecast of 170.7 but well above an average of trade estimates for 166.2 bpa.
The USDA also wrong-footed investors by increasing its soybeans yield forecast to 49.4 bpa from 48.0, rather than trimming it as expected.
"It was a surprising report, despite the drought the USDA is expecting good production for corn and soybeans," said one agricultural commodities analyst.
"There is scope for downgrade in production estimates going forward as both corn and soybeans estimates above the top end of the range."
Traders have been grappling with erratic crop weather that has left some crop belts parched and others soggy.
Rainfall was forecast to be limited this week in much of the Midwest but heavy rain was projected towards the end of next week.
"Market attention now turns back to weather, with yield potential for US soybeans and corn remaining the key focal point for the next month," Rabobank analysts said in a note.
"We believe that, due to the high level of inconsistency of (corn) crop conditions, it is highly likely that much will remain unknown until harvesting begins."
Wheat markets remained dampened by the USDA's supply outlook, which included a sharp increase in projected global wheat stocks in 2017/18, supported by increased estimate for Russian, Ukrainian and Kazakh crops.
The USDA lifted its Russian crop forecast to a record 77.9 million tonnes, and Russian consultancies SovEcon and IKAR on Friday gave similar estimates for the world's biggest wheat exporter last season.
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