Wheat inches lower, subdued USDA forecast caps losses

CANBERRA: US wheat futures edged lower on Wednesday, though the US Department of Agriculture's (USDA's) forecast for lower global supplies provided kept losses in check.

FUNDAMENTALS

• The most active wheat futures on the Chicago Board of Trade were down 0.6% at $6.52-3/4 a bushel by 0204 GMT, after ending 1.5% higher on Tuesday.

• The most active soybean futures were down 0.3% to $14.35-1/4 a bushel, after closing up 0.4% in the previous session.

  • The most active corn futures were down 0.7% to $5.42 a bushel, after falling 0.2% on Tuesday.

  • The USDA in its monthly supply/demand report cut its forecast of the amount of wheat left over globally at the end of the 2020/21 marketing year to 301.19 million tonnes, from 304.22 million tonnes in February, citing China's demand for feed wheat.

The figure was below the lowest in a range of analyst expectations.

• The USDA raised its projection for global corn ending stocks to 287.67 million tonnes, from 286.53 million tonnes last month, at a time when analysts were expecting a cut.

• The USDA lifted its forecast for Brazil's 2019/20 and 2020/21 soybean harvests.

  • But the market has shrugged this off as tight US soy stocks and dwindling global vegetable oil supplies offset weighed.

MARKET NEWS

• The US dollar remained lower against major rivals after pulling back from multi-month highs as a retreat in Treasury yields reduced the currency's appeal.

• Oil fell to around $68 a barrel on Tuesday in a choppy session, pressured as concerns faded of a supply disruption in Saudi Arabia, which countered a pause in the dollar's rally and prospects for tighter supply due to OPEC+ output curbs.

• Asian stocks were set to track US gains, as falling bond yields eased concerns about surging inflation, although focus will shift to Chinese markets amid worries about policy tightening in the world's second-largest economy.