SINGAPORE: Chicago wheat lost more ground on Friday, falling for a second day and on track for a weekly loss, as the market was weighed down by the US government's projection of the largest acreage in three years.
Soybeans slid from a five-month top, while corn dipped in sympathy with the weakness in wheat.
While corn is headed for a weekly drop, soybeans are on track to gain for a second straight week amid concerns over supplies from drought-stricken South America.
"The sentiment is turning more bearish on grains, given the forecasts of larger acreage in the US, flattening ethanol demand growth, plenty of wheat," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.
"The only bullish story around corn at the moment is demand from China, which has been sniffing around for some US corn."
Private exporters reported the sale of 120,000 tonnes of US corn to China for 2011/12 delivery and 110,744 tonnes of US corn for 2011/12 delivery to unknown destinations.
Chicago Board of Trade March wheat fell 0.5 percent to $6.38-1/2 per bushel by 0352 GMT, while March corn fell 0.3 percent at $6.37-1/2.
Soybean for March delivery was down 0.2 percent at $12.74-1/2 per bushel, off a five-month high of $12.80 hit in the previous session on the continuation chart.
Wheat and corn are headed for weekly losses of less than a percent, while soy is on track to gain about half a percent gain this week.
Global crop prices will retreat sharply this year as farmers around the world expand production to bring stability back to commodity markets and ease fears of food inflation, according to the US government.
The US Department of Agriculture forecast US wheat plantings at 58 million acres, up 3.6 million acres from 2011. USDA pegged world wheat stocks at record 213.1 million tonnes.
USDA's outlook conference left unchanged from its baseline projections the forecast for 94.0 million acres of corn this year in the United States, the most since 1944. It forecast plantings of the eight major crops at 254.4 million acres, up from a previous estimate of 251.2 million.
A larger volume of corn and wheat are also expected to come to international markets from the Black Sea region's leading grain producers, Kazakhstan and Ukraine, posing a bigger challenge to US exporters and threatening to drag down global prices.
The International Grains Council raised its global wheat production forecast by five million tonnes to a record 695 million and expects world stocks to rise to 211 million tonnes, eclipsing the previous record in 1999/2000.
The market is now eyeing USDA's weekly export sales report scheduled for release later in the day.
USDA report projected soybean acreage at 75 million, unchanged from 2011 but up 1 million acres from the baseline forecast issued earlier this month.
Soybean futures rose to a five-month high on Thursday, helped by a weaker dollar, good export demand and concerns about crop production in Argentina and Brazil.
Argentina's biggest grains exchange slashed 5 million tonnes from its forecast for the country's drought-damaged soy crop on Thursday.
Weeks of dry weather battered young soy and corn crops in the South American country. The Rosario grains exchange also trimmed its forecast for corn production, to 19.8 million tonnes from 21.4 million tonnes a month ago.
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