BEIJING: Chicago wheat futures edged down on Monday, as expectations of strong supply pressured the contract following a rebound of more than 1% in the previous trading session.
Corn was also trading slightly lower, while soybeans snapped three sessions of gains.
"The market is still working out the availability of supply for world wheat. The Australian crop keeps getting bigger," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.
"Australia's crop is about 65% to 70% harvested, we're getting close to knowing what the exact crop is. We think it's over 38 million tonnes." The most-active wheat contract on the Chicago Board of Trade was down 0.3% at $7.83 a bushel, as of 0306 GMT.
The US Department of Agriculture (USDA) last week raised its global wheat ending stocks view by a greater-than-anticipated 2.38 million tonnes on a stronger production outlook for Australia, Canada and Russia.
Future developments from Russia, the world's largest wheat exporter, will also be key for the market.
"One estimate put Russia's winter wheat planting down about 1% on 2021. Still, with normal yields, that would imply a 5.5 million tonnes lift in Russia's wheat crop in season 2022," said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia, adding that Russia's wheat export quota is due soon.
Russia has said it will set a grain export quota in the first half of 2022 to secure domestic supply amid high food inflation, and is considering setting it at 14 million tonnes for Feb. 15 to June 30, sources reported.
Meanwhile, the most-active corn contract dipped 0.1% to $5.90 a bushel, while soybeans were slightly down 0.1% to $12.67 a bushel.
Commodity funds were net buyers of Chicago Board of Trade wheat, soybean and soymeal futures contracts on Friday and net sellers of soyoil, traders said.
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