Chicago | Reuters — U.S. soybean futures closed higher on Tuesday after the U.S. Department of Agriculture trimmed its forecast of U.S. 2017-18 soybean ending stocks in a monthly report, bucking trade expectations for an increase.

Wheat closed modestly higher on technical buying and worries about poor weather in the U.S. Plains wheat belt, while corn drifted lower.

Chicago Board of Trade May soybean futures settled up three cents at $10.50 a bushel after reaching $10.64, the contract’s highest in a month (all figures US$).

CBOT May wheat ended up 1-1/4 cents at $4.92 a bushel while May corn closed down 1-1/2 cents at $3.89-1/4 a bushel.

Soybeans climbed to session highs after USDA trimmed its 2017-18 U.S. soybean ending stocks forecast to 550 million bushels, down from 555 million last month and below an average of analyst estimates for 574 million.

The government raised its estimate of the U.S. 2017-18 soybean crush, implying strong processor demand for soybeans and increased production of soymeal, while leaving its U.S. soy export forecast unchanged.

“That might have been a mild surprise,” Allendale Inc. chief strategist Rich Nelson said of the unchanged soybean export forecast.

“Given the drop for Argentina’s production, it’s relatively reasonable. They (USDA) are going to take a wait-and-see attitude until they see if we get extra sales from the lower Argentine crop,” Nelson said.

USDA slashed its estimate of Argentina’s drought-hit soybean crop to 40 million tonnes, from 47 million in March, while raising its estimate of Brazil’s soy crop to 115 million tonnes, from 113 million last month.

CBOT soybeans got an early boost after USDA through its daily reporting system said private exporters sold 120,000 tonnes of U.S. new-crop soybeans to Argentina, marking the South American country’s largest purchase of U.S. soybeans in 20 years.

CBOT wheat futures closed higher after a choppy session as traders returned their focus to poor weather in the southern U.S. Plains winter wheat belt. USDA late on Monday rated 30 per cent of the U.S. winter wheat crop in good to excellent condition, down from 32 per cent a week earlier and 53 per cent a year ago.

However, some traders said the firm close in CBOT wheat was mostly technical, noting K.C. hard red winter wheat futures ended lower.

U.S. ending stocks for wheat were raised to 1.064 billion bushels from 1.034 billion in USDA’s report. Wheat usage in the feed and residual sector was cut by 30 million bushels.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney.