Corn, soybeans retreat as USDA's modest supply cuts disappoint

CHICAGO: US corn and soybean futures turned lower on Thursday after the US Department of Agriculture (USDA) trimmed its soybean supply outlook by less than expected and left its corn stocks view unchanged in an monthly report.

Wheat futures pulled back from early highs on spillover pressure from retreating corn and soybeans, but the market clung to early gains amid signs of possible export curbs by top supplier Russia.

Grain and soybean futures had built in solid price premiums heading into USDA's December supply-and-demand report as analysts had expected the agency to cut corn and soybean supplies amid robust demand and dry weather in South American crop areas.

The agency made smaller-than-anticipated cuts to supplies of both commodities while expected demand increases disappointed traders.

"I'm not going to say the report was bearish. I just don't think it was necessarily bullish enough to inspire continued buying," said Joe Vaclavik, president of Standard Grain brokerage.

"The old saying is 'you've got to feed the bull.' It was not enough to feed the bull."

Brazil's CONAB also cut its corn and soybean crop outlooks on Thursday, citing dry conditions. The USDA left its Brazilian crop forecasts unchanged.

Chicago Board of Trade (CBOT) January soybeans ended down 5-3/4 cents at $11.52-3/4 a bushel after peaking at $11.78 ahead of the USDA data. March corn fell 2-1/2 cents to $4.21-1/4 a bushel after hitting a high of $4.27-1/2 ahead of the report.

CBOT March wheat gained 13-1/4 cents to end at $5.96-1/2 per bushel, a near-two-week high.

Wheat prices drew support from renewed signs that Russia, the world's top wheat supplier, may curb exports. The country is considering imposing a grain export quota and wheat export tax for Feb. 15-June 30, following President Vladimir Putin's criticism of rising food prices, sources told Reuters.