Grains seesawed on Wednesday in thin, choppy trade before ending little changed, as investors placed their bets ahead of a key US Department of Agriculture (USDA) report on Thursday. Improving weather for European wheat and South American corn and soybeans weighed down grains, along with a firm US dollar and crude oil's tumble well off its daily highs.
"That's been the trend ahead of recent major government reports, there's position-evening," said Brian Basting, analyst at Advance Trading in Bloomington, Illinois. "Choppy probably is the best way to describe it." Corn and wheat had the biggest downside, falling at times by more than 1 percent before recovering.
"It might be telling us, if technicals break down truly today, that world ending stocks might not be as low as people think or production losses in South America may not be as big as people think," said Don Roose, president of Iowa-based US Commodities. "We were hit with two big items - one was the South America drought, and that's improved. The other thing is we got hit with the Europe/(Former Soviet Union) freeze - well you can only do so much damage from a freeze."
Traders expect the USDA to reduce South American corn and soybean production estimates after drought limited crop yields. Chicago Board of Trade March wheat gave up earlier gains to dip 0.2 percent, or 1-1/2 cents, to $6.60-3/4 a bushel, touching a one-week low.
Bitterly cold weather in key winter wheat-growing areas of the Black Sea region plus European Union countries including France, Germany and Poland had underpinned wheat in past days, but temperatures rose in some regions on Wednesday.
Ukraine is likely to bring in a grain harvest of 45 million tonnes in 2012 - its fourth-largest in 20 years - despite a severe drought and cold snap that hit its winter grain crops, said Ukrainian analyst UkrAgroConsult. Wheat was underpinned by signs of improving demand for US exports, after Spanish buyers bought 200,000 tonnes of US wheat in the past week.
Analysts in a Reuters poll expected USDA to show domestic end-of-season stocks of wheat for the 2011/12 crop year at 867 million bushels, down slightly from the government's January estimate of 870 million bushels. Chicago March corn settled up 1/4 cent at $6.42-1/2 a bushel, while March soybeans eased 1/2 cent to $12.31-1/2 a bushel. Soybeans earlier touched a fresh three-month high in the nearby contract of $12.44-3/4.