Wheat dips from 2-month top, corn down ahead of Bernanke speech
Wheat is under pressure because of the improved crop outlook in Canada and Australia, with the International Grains Council revising its estimates for the 2011/12 crop, even though a severe drought is threatening US winter plantings.
"For wheat, there are a number influences in the market right now which will limit any rally," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore.
"We had Stats Canada numbers that came out and Australia is also talking about a good spring crop."
Chicago Board of Trade's actively-traded December wheat fell 0.5 percent to $7.84 a bushel, after touching $7.93 a bushel in the last session, the highest since mid-June.
December corn fell 0.3 percent to $7.41-1/4 a bushel and November soy lost 0.3 percent to $13.88-1/2 a bushel.
All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling US economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.
Asian shares edged up marginally on Friday as investors waited for Bernanke's speech, while nervousness about the US economic outlook sent the dollar higher.
In a speech at the same event a year ago, Bernanke signaled the launch of the Federal Reserve's $600 billion bond-buying exercise, or QE2, that helped to rally commodities.
Fundamentally, the wheat market is likely to come under supply pressure, while corn and soybeans are likely to be supported by tight supplies and harsh weather hampering production in the United States.
"I am bearish wheat as I think the market is very heavy but I don't see wheat prices falling so heavily with corn fundamentals so tight," said Ofon.
"You are also going to be getting a little bit jittery about what is happening to soybeans as yields in the US are going to suffer."
The International Grains Council on Thursday cut its forecast for global maize production in 2011/12 by 10 million tonnes to a still record 849 million, citing a further decline in US yield prospects.
Global wheat production in 2011/12 was upwardly revised by 3 million tonnes to 677 million.
Australia's chances of boosting high protein wheat output have improved after the country's weather bureau forecast rain this weekend across parched regions that produce high quality wheat.
The Statistics Canada said earlier this week farmers expect a larger wheat harvest in 2011 at 24.08 million tonnes, up 3.9 percent from last year's 23.167 million. On average, analysts' forecasts were lower at 23.5 million tonnes.
Still, drought in the US Plains hard red winter wheat region has led to concerns about conditions for seeding this autumn for the crop to be harvested in 2012.
Triple-digit temperatures baking the southern United States were amplifying the effects of the historic drought in the region and forecasts offered little hope for immediate relief.
Corn and soybeans were being supported by news from the annual Pro Farmer crop tour.
Crop scouts on the western leg of the tour said late plantings hurt production prospects in southwestern Minnesota and scouts in the east said corn yields in southeast and east-central Iowa were better than average but the soy yield potential was variable.
Copyright Reuters, 2011