Wheat curbed by global supply as market waits on USDA report

• Grain markets consolidate before 12 Sept. USDA forecasts
• Big Russian crop, new Egypt import snag weigh on wheat
• Focus of USDA report to be corn, soybean yield revisions

Paris/Singapore (Reuters): Chicago wheat eased on Monday as swelling harvest supplies in the Black Sea export region hung over a subdued market a day ahead of closely watched US government crop forecasts.

Corn futures also slipped while soybeans were marginally higher as investors adjusted positions before Tuesday’s US Department of Agriculture (USDA) crop report that will be watched in particular for revised estimates of US corn and soybean yields.

The Chicago Board of Trade most-active wheat contract was 0.9% lower at $ 4.34 a bushel by 1129 GMT, reversing a small rise seen during Asian trading.

Despite a drop in US wheat production this year, a record Russian harvest and large crop in Ukraine are expected to keep international markets well supplied this year. “There seems to be no end to the upward revisions of the 2017/18 Russian crop,” Commerzbank analysts said in a note. “Russia has been able to step up its exports by 7% so far this season.”

Renewed uncertainty over import conditions in Egypt also dampened sentiment. 

The world’s biggest wheat importer is considering rejecting a French wheat cargo due to the presence of poppy seeds, raising the threat of a fresh standoff with suppliers over inspection terms.

In Canada, meanwhile, the spring wheat harvest could be larger than expected, adding to ample global supplies of the grain, crop analysts said, although quality has been variable.

The most-active CBOT corn contract was down 0.4% at $ 3.55-1/4 a bushel while soybeans were up 0.2% at $ 9.64-1/4 a bushel.

Analysts broadly expect the USDA to trim its US corn yield forecast in Tuesday’s monthly report but good yields are still anticipated, which could maintain large stockpiles.

There has been some concern over soybean yields after dry conditions in part of the US Midwest and the risk of some damage from Hurricane Irma to soy crops in the southeast.

Soybean prices have also drawn support from export demand, which has countered supply pressure from a record Brazilian crop.

The USDA said on Friday morning that private exporters reported the sale of 264,000 tons of soybeans to China for delivery during the 2017/18 marketing year, the biggest flash sale in 2-1/2 weeks.

Weekly export sales of soybeans totalled 1.16 million tons, the USDA said, topping market forecasts.

China, the world’s largest soybean buyer, imported 8.45 million tons of soybeans in August, a record for the month, customs figures showed.