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Wheat ticks down after rally, strong demand forecast limits decline

Chicago wheat futures slid on Wednesday, taking a breather from a strong run-up in the last session, although the U.S. Department of Agriculture’s (USDA) forecast for strong demand put a floor under the market.

Soybeans eased after four straight sessions of gains, while corn dipped for a second consecutive day.

“The USDA increased overall global demand for soybeans, corn and wheat,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.

“But the biggest surprise was that they increased China’s demand for wheat imports.”

The USDA in its World Agricultural Supply and Demand Estimates report forecast China’s wheat imports in 2020/21 to jump to 10.5 million tonnes, almost double from a year ago.

The most-active wheat contract on the Chicago Board of Trade (CBOT) fell 0.7% to $6.52-1/4 a bushel by 0428 GMT, after rising 1.5% on Tuesday.

Soybeans were down 0.4% to $14.33-1/2 a bushel, after closing up 0.4% in the previous session, and corn lost 0.9% to $5.41 a bushel, after falling 0.2% on Tuesday.

The USDA in its monthly supply/demand report cut its forecast of the amount of wheat left over globally at the end of the 2020/21 marketing year to 301.19 million tonnes from 304.22 million tonnes in February, citing China’s demand for feed wheat. The figure was below the lowest in a range of analyst expectations.

The agency raised its projection for global corn ending stocks to 287.67 million tonnes from 286.53 million tonnes last month, at a time when analysts were expecting a cut. It also lifted its forecast for Brazil’s 2019/20 and 2020/21 soybean harvests.

Port premiums for Brazilian soybeans have turned negative as rains disrupt harvesting and transportation of the oilseeds in key growing states such as Mato Grosso, analyst Luiz Roque from agribusiness consultancy Safras & Mercado said on Tuesday.

Commodity funds were net sellers of CBOT corn futures contracts on Tuesday and net buyers of soyoil, wheat, soybean and soymeal futures, traders said.
Source: Reuters (Reporting by Naveen Thukral; Editing by Subhranshu Sahu)

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