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Soybeans Stay Firm As USDA Expected To Tighten Supply Outlook

By Donna Ahern
Soybeans Stay Firm As USDA Expected To Tighten Supply Outlook

Chicago soybeans rose for a third consecutive session on Wednesday to a one-week high as a US government report later in the day is expected to reduce the harvest outlook.

Corn was little changed while wheat eased after a day-earlier rally as investors adjusted positions before the US Department of Agriculture's monthly supply and demand forecasts at 1600 GMT.

Analysts expect the USDA to cut its forecast for the US soybean harvest, after the agency slashed its plantings estimate in a 30 June acreage report, and also trim its yield projection.

A smaller-than-expected improvement in weekly soybean crop ratings on Monday raised doubts about whether recent rain will boost drought-affected crops in the Midwest.

"Soybeans remain firm ahead of tonight's USDA report, with traders expecting the US balance sheet to be under pressure due to both reduced plantings and worsening crop conditions," consultancy Agritel said in a note.


A lower dollar and stronger crude oil lent further support to soybeans as investors also looked ahead to US inflation data on Wednesday for another pointer on interest rate policy.

Chicago Board of Trade

The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.9% to $13.72-1/2 a bushel at 0852 GMT, after earlier climbing to its highest since 5 July.

CBOT corn Cv1 added 0.2% to $5.02-1/4 a bushel and wheat Wv1 fell 1.0% to $6.53-3/4 a bushel.

For corn, analysts expect only modest changes to the USDA's production outlook as the agency is seen incorporating an upward revision to acreage from its June 30 report while reducing its yield forecast.


Sluggish export demand for corn remains a concern as farmers in Brazil continue to harvest a bumper second crop.

Strong Gains 

Wheat gave back some of its strong gains from Tuesday when a drone strike on Ukraine's Odesa port revived worries about war disruption to Black Sea trade in the run-up to next week's deadline for renewing a grain shipping corridor from Ukraine.

Wheat traders continued to assess mixed supply prospects in the northern hemisphere, with drought causing concern about spring wheat conditions in North America but a large crop in Russia expected to maintain high exports from the world's top wheat supplier.

Read More: Wheat Near Six-Week High On Black Sea Supply Concerns, Soybeans Firm

News by Reuters, edited by Donna Ahern, Checkout. For more supply chain news, click here. Click subscribe to sign up for the Checkout print edition.

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