Wheat lower as rains target Russia; USDA data awaited

CHICAGO: US wheat futures fell to a one-week low on Wednesday on position-squaring ahead of a monthly crop report from the US Department of Agriculture and forecasts for welcome rains in Russia's crop belt, analysts said.

Soybean and corn futures were also lower ahead of the USDA's report, while soyoil futures firmed, following strength in crude oil.

As of 1:07 p.m. CDT (1807 GMT), Chicago Board of Trade July wheat was down 4 cents at $5.10-1/2 per bushel after dipping to $5.06-1/4, its lowest since May 1. CBOT July soybeans were down 3-1/2 cents at $10.16-3/4 a bushel and July corn was down 3/4 cent at $4.02-1/2.

Wheat led the declines on a percentage basis as traders monitored outlooks for moisture arriving in Russia, projected as the world's top wheat exporter for the 2017/18 marketing year.

The rain "should help restore the health of that crop and leave them with large production once again," said Brian Hoops with Midwest Market Solutions.

Plentiful global wheat supplies have fueled strong competition for export business. Ahead of the USDA's May supply/demand report on Thursday, the average estimate of US 2018/19 world wheat ending stocks among analysts surveyed by Reuters was 269.18 million tonnes, down from a record-high 271 million at the end of 2017/18.

"Winter wheat prices are leading the complex lower ahead of tomorrow's big USDA report that is expected to show smaller, but still ample, global supplies," INTL FCStone chief commodities economist Arlan Suderman said in a client note.

Soybeans fell, with the July contract testing chart support at its 200-day average near $10.16. Some analysts cited drier forecasts for Argentina, where the soybean harvest has been stalled by rain.

Others noted ongoing worries about US soy export prospects amid uncertainty surrounding US trade relations with China, the world's top soybean buyer.

Analysts on average expect the USDA on Thursday to lower its forecasts of domestic and global 2017/18 soybean ending stocks.

For corn, analysts expect little change in the USDA's forecast of 2017/18 ending stocks from its April figure near 2.18 billion bushels. But they expect the government to project a drop in corn stocks to 1.628 billion bushels by the end of 2018/19.