Content ID

333973

GRAINS-Wheat hits 1-week low on recession fears, corn falls on U.S. harvest

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Wheat fall 1.4% to 1-week low; corn, soybeans ease

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U.S. harvest weather weighs on corn, soybean futures

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Sovecon ups its forecast for Russia's wheat crop

(Recasts with change in market direction, adds quote in paragraphs 3-4)

By Naveen Thukral

SINGAPORE, Sept 26 (Reuters) - Chicago wheat futures extended losses on Monday, with prices hitting a one-week low as fears of a global economic downturn and expectations of a record crop in Russia weighed on the market.

Corn and soybean futures slid on pressure from dry weather aiding the U.S. harvest.

"The prime movers were the broader macro context and the attendant surge in the U.S. dollar," said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.

"The other news was some analysts pushing their Russia wheat crop estimates as high as 100 million tonnes."

The most-active wheat contract on the Chicago Board of Trade (CBOT) fell 1.5% to $8.67-1/2 a bushel, as of 0459 GMT, after dropping more than 3% on Friday.

Corn gave up 1% to $6.70-1/4 a bushel and soybeans fell 1% to 14.12 a bushel.

Sterling slumped to a record low, prompting speculation of an emergency response from the Bank of England, as confidence evaporated in Britain's plan to borrow its way out of trouble, with spooked investors piling in to U.S. dollars.

The Russia-focused Sovecon consultancy said on Thursday it had raised its forecast for Russia's 2022 wheat crop to 100 million tonnes from 94.7 million tonnes due to high yields of spring wheat.

Outlooks for clear Midwest weather weighed on corn prices, even though the U.S. Department of Agriculture has projected a smaller crop compared to a year ago.

The harvest is just beginning in the heart of the corn belt, with 7% of the U.S. corn crop and 3% of the U.S. soybean crop cut as of Sept. 18.

South American soybean production will hit a record high in the season that is now being planted, agribusiness consultancy Datagro said on Friday, citing an expected area expansion to an all-time high.

The market continues to monitor the impact of the Russia-Ukraine war. U.S. and European wheat futures markets on Thursday reached their highest levels since July 11, after Moscow's moves to mobilise more troops and back referendums on joining Russia in occupied regions of Ukraine fuelled concern about further disruption to vital Black Sea grain trade.

A total of 211 ships with 4.7 million tonnes of agricultural products on board have left Ukraine so far under a deal brokered by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Saturday.

Ukraine's 2022 grain harvest could total between 54.1 and 55.7 million tonnes compared with a record 86 million tonnes due to the Russian invasion which has reduced the harvested area, analyst APK-Inform said on Saturday.

French farmers had harvested 26% of this year's grain maize crop by Sept. 19, compared with 14% a week earlier, farm office FranceAgriMer said on Friday.

Large speculators raised their net long position in CBOT corn futures in the week to Sept. 20, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans. (Reporting by Naveen Thukral; Editing by Subhranshu Sahu and Rashmi Aich)

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