June 12, 2020 / 9:57 AM / a month ago

GRAINS-Wheat at 3-week low as USDA outlook adds to supply pressure

    * USDA raised U.S. wheat crop, hiked world stocks to record
    * Wheat already pressured by U.S. harvest, higher Russia estimates
    * Corn steady after USDA cut ethanol demand less than expected
    * Soybeans also steady as China demand underpins oilseed market

 (Updates with European trading, changes byline/dateline)
    By Gus Trompiz and Colin Packham
    PARIS/SYDNEY, June 12 (Reuters) - Chicago wheat eased to a three-week low on
Friday as a U.S. government forecast of record world wheat stocks added to
supply pressure from an advancing U.S. harvest and increased crop estimates in
    Corn was little changed as traders weighed the U.S. Department of
Agriculture's (USDA) June supply-demand report that increased projected U.S.
corn inventories but cut ethanol demand by less than anticipated by some
    Soybeans edged higher as a run of exports to China supported prices and
offset the USDA's reduced estimate of U.S. soy exports this season. 
    Grain markets also found some support in steadier equity and commodity
markets, after a day-earlier slide triggered by fears that a fresh wave of
coronavirus infections could worsen an economic downturn.
    The most active one-month wheat contract on the Chicago Board Of Trade
was down 0.8% at $4.95-1/2 a bushel by 0948 GMT. It was near a session low of
$4.95-1/4, its weakest since May 18.
    "The USDA's crop report has sunk the wheat because it added a hefty amount
to their global wheat inventory estimate," said Tobin Gorey, director of
agricultural strategy, Commonwealth Bank of Australia.
    In addition to raising expected world inventories to a record 316 million
tonnes for 2020/21, the USDA increased its outlook for the U.S. harvest and for
U.S. stocks.
    The start of the U.S. harvest and upward revisions by leading consultancies
SovEcon and IKAR to their forecasts for this year's Russian wheat harvest have
also curbed wheat prices this week.
    But analysts noted that much of the USDA's global supply was accounted for
by China and India, and that uncertainty remained over northern hemisphere
harvests after dry spells in spring.
    "With weather risk remaining, CBOT wheat will likely hold on to its price
range for the next four to six weeks," Rabobank said.
 Prices at 0948 GMT                                                    
                                  Last  Change    Pct      End  Ytd Pct
                                                 Move     2019     Move
  CBOT wheat                    495.50   -3.75  -0.75   558.75   -11.32
  CBOT corn                     330.25    0.50   0.15   387.75   -14.83
  CBOT soy                      867.00    1.00   0.12   955.50    -9.26
  Paris wheat December          184.75    0.00   0.00   188.75    -2.12
  Paris maize Aug               168.25    0.00   0.00   180.00    -6.53
  Paris rape Aug                375.50    0.00   0.00   411.50    -8.75
  WTI crude oil                  36.37    0.03   0.08    61.06   -40.44
  Euro/dlr                        1.13    0.00   0.15   1.1210     0.93
 Most active contracts - Wheat, corn and soy US cents/bushel, Paris
 futures in euros per tonne

 (Reporting by Gus Trompiz in Paris and Colin Packham in Sydney; Editing by
Rashmi Aich and Nick Macfie)
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