Wheat near 3-month top on lower U.S. output, tight world supply

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SINGAPORE — Chicago wheat futures kicked off the last quarter of 2022 on a bullish note on Monday, with prices climbing 1% after a U.S. government report reduced its production estimate amid tightening world supplies.

Corn rose for a second consecutive session on forecasts of lower supplies in the United States and Europe, while soybeans rose after declining on Friday.

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FUNDAMENTALS

* The Chicago Board of Trade (CBOT) most-active wheat contract was up 1% at $9.30-3/4, as of 0039 GMT, not far from Friday’s three-month high of $9.46 a bushel.

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* Corn added 1.1% to $6.84-3/4 a bushel and soybeans gained 0.5% to $13.71-1/2 a bushel.

* The 2022 U.S. wheat harvest was smaller than previously forecast, the U.S. Department of Agriculture (USDA) said in its annual Small Grain Summary report, cutting its crop assessment to 1.650 billion bushels.

* This compared with analysts’ average estimate of 1.778 billion bushels in a Reuters poll, and 1.783 billion bushels in the USDA’s August assessment.

* The world is heading toward the tightest grain inventories in years despite the resumption of exports from Ukraine, as the shipments are too few and harvests from other major crop producers are smaller than initially expected.

* Corn prices were underpinned by tighter-than-expected stocks, with the USDA pegging corn stocks at 1.377 billion bushels, down from trade expectations of 1.512 billion bushels.

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* U.S. corn inventory estimates came as the European Commission cut its forecast for this year’s maize harvest in the region to 55.5 million tonnes from 59.3 million in late August, joining other forecasters in projecting a 15-year low for the drought-hit crop.

* The 6.4% decrease marked the third sharp reduction in a row to the Commission’s monthly forecast for corn harvest.

* Large speculators cut their net long position in CBOT corn futures in the week ended Sept. 27, 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.

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* Soybean slid on Friday after the USDA upgraded its stocks assessment to 273.76 million bushels, significantly higher than the average trade guess of 242 million bushels.

* Heightening Russia-Ukraine tensions provided additional support to wheat and corn futures.

* Russian President Vladimir Putin proclaimed the annexation of a swathe of Ukraine in a Kremlin ceremony on Friday after holding what Russia called referendums in occupied areas. Western governments and Kyiv said the votes breached international law and were coercive and non-representative.

MARKET NEWS

* Wall Street and global stocks slumped further on Friday, with government bond yields and the dollar holding near recent peaks, as higher-than-expected inflation capped a nasty third quarter for world markets.

DATA/EVENTS (GMT, Sept) 0030 Japan JibunBK Mfg PMI Final SA 0750 France S&P Global Mfg PMI 0755 Germany S&P Global/BME Mfg PMI 0800 EU S&P Global Mfg Final PMI 0830 UK S&P GLBL/CIPS Mfg PMI FNL 1345 US S&P Global Mfg PMI Final 1400 US ISM Manufacturing PMI British finance minister, Kwasi Kwarteng, speaks at the annual Conservative party conference in the aftermath of the pound plummeting following his mini-budget (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips)