Corn hits contract low on supply pressure, wheat up for 2nd day

SINGAPORE: Chicago December corn futures hit a contract low on Wednesday, weighed down by plentiful world supplies and lacklustre demand.

Wheat rose for a second session on short-covering, although record global supplies kept a lid on the market.

Corn is coming under pressure as a bumper US harvest is adding to a global supply glut, while the weather in South America for the 2018 crop looks benign for the moment.

The US Department of Agriculture (USDA) late Monday said the US corn harvest was 95 percent complete.

"Corn appears to be standing on the doorstep of a new season low," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"The USDA have forecast an increase in production for next year's season. This will add further pressure on this year's export figures."

US farmers are likely to plant a record amount of land with soybeans in 2018 and will also boost the area devoted to most other major crops, the USDA said on Tuesday.

If the forecasts are borne out, then another year of bumper supply could prolong a global glut of grains that has kept prices of soybean and corn depressed for years.

The Chicago Board of Trade December corn contract was down 0.1 percent at $3.36 a bushel by 0143 GMT after earlier in the session hitting a contract low of $3.35-1/2 a bushel.

Wheat added 0.3 percent to $4.12 a bushel and soybeans gave up 0.1 percent to $9.92-1/2 a bushel.

The USDA expects soybean plantings to rise to 91.0 million acres in 2018/19, topping the record high set in 2017/18 at 90.2 million. But it forecast 2018/19 soybean ending stocks tightening to 376 million bushels, from 425 million at the end of 2017/18.

The USDA said US corn stocks at the end of the 2018/19 marketing year, on Aug. 31, 2019, would grow to 2.607 billion bushels, from 2.487 billion at the end of 2017/18.

Underscoring the challenging export scenario for US wheat, Egypt's main state grain buyer said it bought 120,000 tonnes of Russian wheat in an international purchase tender. No US wheat was offered.

China has bought around 10 to 12 cargoes of mainly US corn in the past month and is set to step up purchases as a record gap between domestic and international prices encourages buyers to seek out cheap imports.

Commodity funds were net sellers of CBOT corn, soybean, soymeal and wheat futures contracts on Tuesday and net buyers of soyoil futures, traders said.