U.S. grains: CBOT wheat hits three-month high as U.S. cuts global crop

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Chicago | Reuters – Chicago Board of Trade wheat futures climbed to a three-month high on Thursday after the U.S. Department of Agriculture slashed production estimates in exporting countries.

Corn futures set a one-month high on a smaller-than-expected U.S. yield forecast in a USDA crop report that fueled concerns about tightening global grain supplies due to harsh weather.

The monthly report cut the U.S. government’s estimates for wheat harvests by about 24 percent in Canada from July and 15 percent in Russia due to hot, dry conditions.

Drought also hampered U.S. wheat production, which was forecast at a 19-year low, 2.8 percent below the government’s July forecast.

The USDA “took everything out of Russian and Canada on wheat you could ask for and more,” said Charlie Sernatinger, analyst for ED&F Man Capital.

Analyst firm Strategie Grains separately trimmed its European Union soft wheat production forecast by 1 percent.

The most-active wheat contract closed 26-1/2 cents higher at $7.53-1/2 bushel and reached its highest price since May 7 at $7.62. On Paris-based Euronext, wheat futures set contract highs.

CBOT corn ended up 14 cents at $5.73 -1/4 a bushel and touched its highest price since July 2. Soybeans rose 1 cent to $13.41 per bushel.

The USDA estimated U.S. farmers will harvest 14.750 billion bushels of corn, with an average yield of 174.6 bushels per acre, and 4.339 billion bushels of soybeans, with an average yield of 50.0 bushels. The corn crop estimate was down 2.7 percent from July and the soy crop estimate was 1.5 percent lower.

Analysts had been expecting the USDA to peg corn production at 15.004 billion bushels, with an average yield of 177.6 bushels per acre, and soybean production at 4.375 billion bushels, with a yield of 50.4 bushels.

“For corn, we’re looking at a fairly tight carry-over,” said Ted Seifried, chief ag strategist for Zaner Group. “But we have to wonder which way we go from here with crop conditions improving.”

– Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore

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