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CBOT wheat, corn ease after USDA sparked rally on supply concerns

U.S. wheat and corn futures weakened on Friday a day after rising on U.S. Department of Agriculture forecasts that indicated tightening global supplies.

Traders took some profits ahead of the weekend and on expectations that U.S. farmers are advancing corn plantings thanks to improved Midwest crop weather, analysts said. The USDA is slated to issue a weekly update on planting progress on Monday.

Markets remain nervous about tightened grain supplies, though, due to global crop shortfalls and Russia’s invasion of Ukraine, a major wheat and corn exporter, analysts said.

“There is zero tolerance for crop problems in the U.S. this summer,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa, about corn.

The most-active Chicago Board of Trade soft red winter wheat contract Wv1 was down 7-3/4 cents at $11.71 a bushel by 10:20 a.m. CDT (1520 GMT), after rising to a two-month peak. K.C. hard red winter wheat KWN2 and MGEX spring wheat MWEN2 futures also eased after the July contracts set new highs.

Most-active CBOT corn Cv1 dropped 10 cents to $7.81-1/2 a bushel, while soybeans Sv1 rose 23-1/4 cents at $16.37 a bushel.

Strength in crude oil and equities helped support CBOT soy, Pfitzenmaier said.

The USDA reported sales of 132,000 tonnes of U.S. old-crop soybeans to China.

The agency, in a monthly crop report issued Thursday, ignited a rally in wheat futures by projecting six-year low for world stocks next season and a nine-year low for U.S. stocks. Traders were particularly surprised by a lower-than-expected 2022/23 production estimate for U.S. hard red winter wheat, which suffered heat damage. WASDE13

The report reflected “an increasingly tense context linked to the double effect of climatic hazards and tensions on the Black Sea,” consultancy Agritel said.

In France, crop ratings for soft wheat fell sharply last week, data from farm office FranceAgriMer showed, suggesting growing stress for plants from dry weather.
Source: Reuters (Reporting by Tom Polansek in Chicago and Gus Trompiz in Paris; Editing by Shinjini Ganguli and Richard Chang)

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