Wheat steady after rally; corn, soy brace for USDA supply outlook

PARIS/SINGAPORE: Chicago wheat futures were steady on Friday, on course for a sharp weekly gain after a rally fuelled by concerns about freezing US weather and tightening global supply.

Corn was almost flat while soybeans edged higher after prices were pressured on Thursday by a US Department of Agriculture (USDA) projection of record combined acreage for the crops this year.

Attention in grain markets was turning to follow-up USDA supply and demand forecasts later on Friday.

The most-active wheat contract on the Chicago Board Of Trade (CBOT) were up 0.3% at $6.67-1/2 a bushel by 1055 GMT, leaving it up 4.8% so far this week.

After being lifted early in the week by fears of cold weather damage to US crops, Chicago prices were further buoyed on Thursday by consultancy Sovecon's reduced forecast of Russia's 2021 wheat crop, fresh import tenders and a rally on Euronext driven by pre-expiry positioning in spot futures.

Euronext March wheat extended a rally on Friday to reach 242.75 euros ($294.75) a tonne, a highest front-month price since May 2013.

"Wheat prices have risen and we think there is more upside potential," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities.

"Supply risk has been taken into account. We expect Chinese (traders) to return to the market for more wheat which will drive prices higher."

Chinese demand for US grain will be a focus of USDA supply and demand forecasts due to be presented on Friday on the second day of the agency's annual outlook conference.

Robust demand from China as well as domestic users has sent prices for corn and soybeans soaring to multi-year highs in recent months.

CBOT corn was up 0.1% at $5.50-3/4 a bushel and soybeans were 0.5% higher at $13.81-3/4 a bushel.

The USDA on Thursday forecast 2021 corn plantings at 92 million acres and soybeans at 90 million acres, which would represent the largest-ever combined plantings for the two crops.