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Wheat prices ease but still on track for weekly gain

LONDON - U.S. wheat futures fell back slightly on Friday but remained on course for a fourth consecutive weekly gain with dry weather in Russia still a major concern but overall supplies seen ample.

Wheat
A ladybug crawls down a stalk of wheat ready for harvest on the Canadian prairies near Vulcan, Alberta, in this file photo. REUTERS/Todd Korol/Files

LONDON - U.S. wheat futures fell back slightly on Friday but remained on course for a fourth consecutive weekly gain with dry weather in Russia still a major concern but overall supplies seen ample.

Corn and soybean futures were also lower.

December wheat futures on the Chicago Board of Trade was off 0.6 percent at $5.15-1/4 a bushel at 1114 GMT. The contract is on course for a weekly gain of 1.5 percent.

Dealers said the recent run-up had been driven by a lower-than-expected estimate of the U.S. crop and concerns about the outlook for next year's production in Russia.

"Russia is a big issue because of the dryness," said Ole Houe, an analyst at brokerage IKON Commodities in Sydney.

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"It is dry winter seeding, they are going to plant less and what they plant is going to have problems with yields because of the dryness."

Dealers said high stocks should, however, ensure that the market remained well supplied.

"Given the record-high stock levels, there can be no talk of any threat of supply tightening on the global wheat market, so we regard the price rise as exaggerated," Commerzbank said in a market note on Friday.

David Sheppard, managing director at UK merchant Gleadell, noted the U.S. Department of Agriculture's monthly update on U.S. and global production, to be issued late next week, could reinforce sentiment that supplies remain plentiful.

"Although a few tweaks will be required within the US balance sheet, export projections for both the US and EU look top heavy, reiterating the fact - too much wheat, too little demand," he said.

December milling wheat in Paris was off 0.7 percent at 175.00 euros a ton.

Corn and soybean prices were also lower as both markets remained under pressure from bumper U.S. harvests.

Commodity brokerage INTL FCStone said on Thursday it raised its forecast for this year's U.S. corn and soybean crops, with corn output seen at 13.541 billion bushels, up from the firm's forecast a month ago of 13.457 billion bushels.

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The firm in its monthly report, which is based on customer surveys and other factors, estimated U.S. soybean production at 3.919 billion bushels, above their September outlook of 3.791 billion but below the USDA forecast of 3.935 billion.

CBOT December corn was off 0.5 percent at $3.86-3/4 a bushel while November soybeans fell 0.3 percent to $8.74-3/4 a bushel. 

Related Topics: CROPSWHEAT
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