Wheat near one-week high on US crop worries; corn eases

SINGAPORE: Chicago wheat futures slid on Tuesday, but held near a more than one-week high marked in the previous session on concerns about global shortages after the US government cut its harvest forecasts.

Corn lost ground on expectations of higher US output while soybeans rose.

"The USDA (US Department of Agriculture) took the razor to spring wheat production forecasts for the U.S., Russia and Kazakhstan because of the hot and dry conditions in those growing regions," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"The USDA only took just a little off their Canada wheat crop estimate but many, ourselves included, suspect that estimate will drop substantially further."

Wheat extends fall, corn rises ahead of USDA report

The most-active wheat contract on the Chicago Board Of Trade (CBOT) lost 0.4% to $6.38-1/2 a bushel by 0228 GMT, having closed 4.2% firmer on Monday, when prices hit a July 2 high.

Corn dropped 0.8% to $5.28-1/2 a bushel and soybeans climbed 0.2% to $13.52-1/4 a bushel.

The USDA, in a monthly report, slashed its harvest outlook for spring wheat, other than durum, by 41% year-on-year to 345 million bushels, putting it 25% below the average of analysts' estimates.

The USDA, in a separate weekly report, said 16% of the US spring wheat crop was in good-or-excellent condition, down from 68% a year earlier and in line with forecasts.

The agency rated 65% of the US corn crop in good-to-excellent condition, up 1 percentage point from the previous week and in line with analyst expectations following rains last week.

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