Wheat falls to lowest since early October on supply pressure

SINGAPORE: Chicago wheat lost more ground on Monday, with prices dropping to their lowest in more than two months, as estimates of higher production in Australia and Canada offset worries over adverse weather in the US Plains.

Soybeans and corn fell for a second consecutive session as improved weather in Brazil weighed on prices.

"Australian crop keeps getting bigger and we could hit 34 million in the end, however, it is also leaving the country in a frantic pace," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.

"So, the harvest pressure will abate soon and traders may have to pay bit more to chase the grain."

The most-active wheat contract on the Chicago Board Of Trade (CBOT) slid 0.3% to $5.74 a bushel by 0501 GMT, not far from the session low of $5.71 a bushel, the weakest since Oct. 2.

Soybeans were down 0.6% at $11.55-1/2 a bushel and corn lost 0.5% to $4.18-1/4 a bushel.

Wheat is under pressure amid higher production in Canada and Australia.

Canadian farmers produced the smallest canola crop in five years, but the largest wheat output since 2013, Statistics Canada said in its final harvest estimate of the year.

The Australian Bureau of Agricultural and Resource Economics and Sciences has raised the country's production forecast for the 2020/21 season to a near record 31.17 million tonnes.

Dry conditions in Brazil have stoked fears that a disappointing soybean harvest would strain international supplies after China already swept up much of the new US harvest.

But rains in recent days have improved crop condition is some regions.

Brazil's soybean production in the 2020/2021 cycle is expected to jump to a record of 131.79 million tonnes as high prices drove farmers to increase plantings, according to the average of 13 analysts' estimates polled by Reuters on Friday.

This represents a 5.6% rise from what the government says farmers collected last season, which was an estimated 124.8 million tonnes.

China's soybean imports in November jumped from the previous year, customs data showed, as cargoes booked from the United States following the Phase 1 trade deal cleared customs.

China, the world's top soybean buyer, brought in 9.59 million tonnes, up from 8.28 million tonnes in the same month a year earlier.

Large speculators cut their net long position in CBOT corn futures in the week to Dec. 1, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.