Wheat eases after 2-month high on harvest risks; corn, soy steady

PARIS/SYDNEY: Chicago wheat edged lower on Friday ahead of a widely followed US government crop report but was still on course for a 6.5% weekly gain due to rising concern about harvest risks around the world.

Corn and soybean futures ticked higher, supported by forecasts of intensifying heat in the US Midwest from next week as crops approach key summer growth stages.

Price movements were limited in cautious trading before the United States Department of Agriculture's (USDA) monthly supply and demand report at 1600 GMT.

The most-active wheat futures on the Chicago Board Of Trade were down 0.2% by 1028 GMT at $5.23-3/4 a bushel, after rising on Thursday to their highest since April 28 at $5.31-1/4.

Crop estimates this week in major exporting countries like Argentina, France and Russia have raised question marks about global supply, and traders are watching to see if the USDA trims its forecast for US wheat production as expected by analysts.

However, analysts still see global supplies as adequate and demand prospects for grain in food and biofuel clouded by a coronavirus epidemic.

"We are sceptical that we are in for a sustained rally. But nor are we in agreement with the bearish (view) 'there's oodles of wheat in the world'," Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, said.

CBOT soybean futures were up 0.2% at $9.03-1/4 a bushel while corn futures added 0.4% to $3.58-1/2 a bushel.

Analysts on average expect the USDA on Friday to lower its forecasts for US 2020/21 corn production and ending stocks, according to a Reuters poll, in light of the USDA's sharp cut to estimated corn acreage in an end-June planting report.

The market will also be watching for any demand adjustments to corn and soybeans due to recent Chinese demand.