PARIS/SYDNEY: US wheat futures were little changed on Friday in light year-end trading, leaving the cereal market poised for an annual decline of more than 13 percent against a backdrop of record global supplies.
Corn was set to finish the year down nearly 3 percent after the biggest-ever US harvest maintained hefty supply volumes. Both corn and wheat are heading for their fourth straight annual decline.
Soybeans, however, will break a downward trend over the previous three years. The oilseed is on course to climb 17 percent over 2016. The gain reflects robust US exports and wider strength in oilseed markets that have countered pressure from big harvests and a rising dollar.
"The world has produced a lot of wheat and that has been reflected in prices during 2016," said Nathan Cattle, managing director of Clear Grain Exchange.
The US Department of Agriculture and the International Grains Council are each forecasting record world wheat production in 2016/17.
The huge output has led the USDA to project the biggest wheat stocks ever and contributed to an IGC forecast for record global grain stocks at a time when world corn production is also expected to reach an all-time high.
Big harvests in southern hemisphere exporters Australia and Argentina are contributing to ample international supplies.
A latest tender by top wheat importer Egypt on Thursday underlined the competitiveness of Black Sea origins, with Egyptian state grain buyer GASC booking 235,000 tonnes of Russian and Ukrainian wheat.
A rally in the dollar since last month to 14-year highs against a basket of currencies has also made US grains more expensive overseas.
But the US soybean market has defied pressure from the dollar to post brisk exports to China, helping prices maintain an upward trend.
"The US have responded spectacularly well to export demand in soybeans and export forecasts are going to have to be revised up," Gautier Le Molgat of consultancy Agritel said.
"We could see prices coming under pressure however once South American soybeans become available and if production prospects there are confirmed."
Soybeans have also drawn support from other oilseed markets, including Malaysian palm oil futures which rose 25 percent over 2016 to notch up their biggest annual gain since 2010.
Easing concerns about dry weather in Argentina, following recent rainfall, capped corn and soybean prices on Friday in thin trading ahead of the New Year holiday.
But a fall in the dollar, partly due to an abrupt rise in the euro during Asian hours, lent support to US grains.
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