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Corn set for biggest gain in six months on U.S. crop worries

By Naveen Thukral

SINGAPORE, Aug 31 (Reuters) - Chicago corn edged lower on Wednesday amid a broad decline in world markets, although the grain was poised for its biggest monthly climb in six months as declining U.S. and European crop prospects supported prices.

Wheat and soybeans slid on expectations of higher global supplies.

"The market is in the process of pricing a potential poor yield for the season," according to a Hightower report, referring to corn.

The most-active corn contract on the Chicago Board of Trade (CBOT) was down 0.1% at $6.76-1/2 a bushel, as of 0144 GMT. The market is up more than 9% in August, its biggest monthly gain since February.

Wheat has added 1.2% in August, rising for the first time in three months, while soybeans have given up around 3% this month, after closing marginally higher in July.

World stocks tumbled for a third straight session on Tuesday, as investors worried about continued U.S. and European interest rate hikes, after data pointed to persistent inflation in both regions despite central banks' policy tightening so far.

The agricultural markets are monitoring supply prospects as U.S. corn and soybeans approach maturity ahead of the fall harvest. The USDA late Monday rated 54% of the U.S. corn crop in good-to-excellent condition, down from 55% a week earlier.

That came after advisory service Pro Farmer estimated the U.S. corn yield at 168.1 bushels per acre on Friday, well below the USDA's forecast of 175.4. The Pro Farmer harvest projection followed a four-day Midwest crop tour that showed the effects of hot, dry weather in some areas.

Pro Farmer predicted a U.S. soybean crop of 4.535 billion bushels, close to the USDA's August forecast of 4.531 billion bushels. Weekly USDA condition ratings for the soybean crop held steady with 57% rated good-excellent, despite analyst expectations for a downgrade.

Separately, the USDA on Tuesday confirmed private sales of 264,000 tonnes of U.S. soybeans to unknown destinations.

A total of 61 cargo ships carrying around 1.5 million tonnes of food have left Ukraine under a deal brokered by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Tuesday.

The ministry said six ships with 183,000 tonnes of agricultural products left Ukrainian Black Sea ports on Tuesday.

Argentina's producers have sold 51.6% of the 2021/22 soybean harvest so far, the country's Ministry of Agriculture said on Tuesday, lagging behind the 62% sales rate reported at the same point in the previous season.

Argentina soybean production in the 2021/22 cycle was 44 million tonnes, down from 46 million tonnes the previous cycle, according to government data, with the country serving as the world's leading exporter of meal derived from the oilseed.

Consultancy Agritel on Tuesday increased slightly its estimate of this year's French soft wheat crop but warned the European Union's top grain producer was heading for its worst maize harvest this century.

In a cereal market update, it put the 2022 soft wheat crop at 33.63 million tonnes, up from 33.44 million projected a month ago but still below the average of the past five years.

(Reporting by Naveen Thukral; Editing by Rashmi Aich and Sherry Jacob-Phillips)

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