Wheat drops for 2nd session to 10-month low on supply pressure

SINGAPORE/PARIS: Chicago wheat slid for a second session on Tuesday to its lowest in 10 months as the market continued to be weighed down by abundant global supplies.

Soybeans also fell, giving up last session's gains, as a rapidly advancing harvest in top exporter Brazil boosted global supplies.

The most-active wheat contract on the Chicago Board Of Trade was down 0.85 percent at $4.68-3/4 a bushel by 1220 GMT, after dropping to its lowest since April 17 at $4.66-1/2 a

bushel. Wheat closed down 4 percent on Monday.

Soybeans fell 0.55 percent to $9.06-3/4 a bushel, having firmed 0.2 percent on Monday.

Corn slid 0.3 percent to $3.69-1/4 a bushel after hitting a 3-month low of $3.68 a bushel earlier. It closed down 1.3 percent in the previous session.

"The world wheat market is still pretty well supplied," said Phin Ziebell, agribusiness analyst at National Australia Bank.

"Soybeans are down as Brazil's harvest is gathering pace which will increase competition in the market as US pushes to sell soybeans to China, although I think we will have to see where things end up on these trade talks. Overall the global market is well supplied with soybeans."

Wheat is under pressure on technical selling and concerns about stiff global competition in the export market.

The US Department of Agriculture on Monday said 693,964 tonnes of US wheat was inspected for export last week, above market expectations. But season-to-date inspections are about 1.4 million tonnes behind a year ago.

"The good news about sales will not compensate the delays accumulated since the start of the marketing year considering the number of markets captured earlier on by Black Sea origins," French consultancy Agritel said in a note.

In Europe, Euronext milling wheat futures extended a fall after sharp losses the previous day, with benchmark May hitting new 7-month lows at 187.50 euros ($213) a tonne. The contract lost some 7.5 percent in the past two weeks.

Soybeans drew support in the previous session after US President Donald Trump on Monday said he was optimistic a final trade deal with China could be reached, but offered few details.

China committed to buy an additional 10 million tonnes of US soybeans in a meeting on Friday, US Agriculture Secretary Sonny Perdue said on Twitter.

But the global market remains amply supplied with beans.

Brazilian soybean farmers have harvested about 45 percent of fields so far in the 2018/19 season as the work is progressing quickly in top-producing state Mato Grosso, consultancy AgRural said in a statement on Monday.

Harvesting of Brazil's soybean fields is 20 percentage points above last year's levels and significantly above a five-year average of 27 percent of planted area. Farmers in Mato Grosso have harvested about 80 percent of fields, AgRural said.