Wheat, Corn Draw Bargain Buying, Ample Supplies Cap Gains

(Reuters) –  Chicago wheat futures edged higher on Wednesday on bargain buying, although gains were limited due to abundant world supplies.

Corn also picked up after falling almost 2 percent over the previous two sessions after data pointed to a strong U.S. harvest.

The most-active wheat contract on the Chicago Board of Trade (CBOT) rose 0.4 percent to $4.44-3/4 a bushel by 1046 GMT; corn was up 0.2 percent at $3.49 a bushel; and soybeans were up 0.4 percent at $9.69-1/4 a bushel.

“Cheap prices are pushing buyers back to both international and local markets,” French consultancy Agritel said.

Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, said wheat markets in Chicago and Kansas saw steep falls on Tuesday but sizeable buying emerged to turn the market around.

“The market’s continued resilience is bolstering the impression that seasonal price lows are in the rear-view mirror.”

Still, plentiful global supplies continue to offer stiff competition to U.S. exporters.

Statistics Canada sharply lifted its estimate for the 2017 all-wheat harvest on Tuesday, now seen at 27.1 million tonnes, from 25.5 million seen at the end of last month, although still 14.5 percent below 2016.

The decline in Canada’s wheat output comes after lower production in Australia and excessive wet weather reducing the crop in Argentina.

The U.S. corn crop was 7 percent harvested by Sunday, the U.S. Department of Agriculture (USDA) said in a weekly report.

The USDA said 34 percent of the corn crop was mature, well behind the five-year average of 47 percent. But forecasts showed no major weather problems that could threaten late-maturing fields.

Commodity funds were net sellers of CBOT corn, soybean, soymeal and wheat futures contracts on Tuesday and net buyers of soyoil, traders said.