Wheat eases again as US weather woes set against high supply

PARIS/SINGAPORE: Chicago wheat futures slid for a second session on Thursday as investors booked profits after a recent rally and set deteriorating US crop conditions against high global supply.

Soybeans and corn also lost ground, with forecasts calling for less severe crop weather in major exporter Argentina from next week encouraging the markets to consolidate.

The most-active wheat contract on the Chicago Board Of Trade fell 1.2 percent to $4.46-1/4 a bushel by 1221 GMT.

This added to Wednesday's closing loss of 1.2 percent and took the contract further away from a four-month peak of $4.58-3/4 touched in earlier in Wednesday's session.

CBOT soybeans were down 0.7 percent at $9.89-1/4 a bushel and corn lost 0.3 percent to $3.60-1/2.

"The recent upward move has been mainly caused by short-covering trades and cannot be lasting without real climatic incidents," consultancy Agritel said.

"So far, unfavourable weather conditions are concentrated in US winter wheat plains and South American soybeans," it said in a note.

Condition ratings for winter wheat declined in January in several southern US Plains states that have been hit by drought, including top producer Kansas, the US Department of Agriculture (USDA) said on Monday.

But the USDA is projecting record global stocks of wheat this season, and the United Nations' food agency on Thursday said it expected total cereal production worldwide to also reach an all-time high in 2017/18.

"There are plenty of wheat supplies but prices will be influenced by weather as seasonally we are in the weather market for the northern hemisphere crop," said one India-based analyst at an international bank which tracks global agricultural markets.

Corn and soybean traders are monitoring weather in Argentina as drought has reduced plantings and hurt yield potentials for both crops.

The country's parched corn and soybean growing areas will remain dry in the days ahead, forecasters said on Wednesday as farmers calculated yield losses caused by a three-month drought that was expected to get worse before it gets better.

But weather forecasts calling for some rain and easing heat towards the end of next week held out the hope of some relief for developing soy and corn crops.

Commodity funds were net buyers of Chicago Board of Trade (CBOT) corn futures on Wednesday and net sellers of wheat, soybeans, soymeal and soyoil, traders said.

Grain markets will also get a demand update on Thursday from weekly US export sales figures due at 1330 GMT.