(Reuters) – U.S. corn futures eased to trade near a three-year low on Friday, with the market poised for its biggest weekly loss in more than two months on expectations the U.S. government will increase production forecast.
Soybeans were largely unchanged, on track for first weekly gain in three weeks with Chinese demand underpinning prices despite forecasts of higher global supplies.
Chicago Board of Trade March corn is down 3 percent for the week, on course to post its biggest weekly loss since early November. Spot corn hit a trough of $4.08 a bushel on Thursday, its lowest since August 2010.
March soybeans are up 0.2 percent for the week, their first weekly climb in three weeks, and March wheat is down more than 3 percent, the biggest weekly slide in a month.
On Friday, March wheat rose 0.3 percent to $5.85-3/4 a bushel by 0251 GMT, March corn fell 0.3 percent to $4.10-3/4 a bushel and March soybeans little changed at $12.73 a bushel.
“Last night’s weekly U.S. export sales reports were disappointing for wheat, corn and soybeans,” said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.
“Nevertheless, the main focus for the market is tonight’s set of USDA reports. Recent price action implies traders have a significantly large short position, and given the USDA has a habit of surprising, anything could happen tonight.”
The U.S. Department of Agriculture will issue its latest World Agricultural Supply and Demand Estimates (WASDE) at 1700 GMT. The estimates are expected to show an increase in world corn and soybean inventories, according to a Reuters poll of analysts.
Investor sentiment in the wheat market has been dampened by sluggish U.S. exports at a time of ample global supply, and news that Indian traders have sealed a first export deal for the new season wheat illustrated overseas competition.
U.S. wheat export sales of 294,800 tonnes for the week ended Jan. 2 were toward the low end of expectations for 200,000 to 500,000 tonnes.
Weekly U.S. corn export sales of 155,200 tonnes were below expectations of 200,000 to 700,000 tonnes, and weekly soybean export sales of 156,200 tonnes missed estimates for 450,000 to 950,000 tonnes.
The soybean market has found some support in imports by China, the world’s biggest buyer.
The USDA reported separately that China bought 110,000 tonnes of U.S. soybeans for the 2014/15 marketing year, which starts on Sept. 1, the latest in a string of deals.
It reported sales of 115,000 tonnes of U.S. soybeans to China on Wednesday and 350,000 tonnes on Tuesday.
The sales surprised some traders, who had been expecting that China would cancel purchases of U.S. soybeans in favour of purchases of South American soybeans.
In Brazil, the 2013/14 soybean crop may easily exceed 95 million tonnes, Agriculture Minister Antonio Andrade said on Thursday, surpassing crop supply agency Conab’s official estimate of record output of 90.33 million tonnes.
