Chicago soybeans rose for a third consecutive session on Wednesday, climbing to a one-week high as a widely-watched U.S. government report due later in the day is expected to reduce its production and supply estimates.
Wheat edged higher, holding on to last session's strong gains with attention turning to Black Sea supply risks after a drone strike on Ukraine's Odesa port.
Lower Production
"The market is expecting lower soybean production and supply forecasts from the U.S. Department of Agriculture (USDA) because of dryness and lower planting," said one agricultural commodities analyst.
"But the weather has improved over the last couple of weeks which has reduced the impact of drought."
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 rose 1.1% to $13.75-1/2 a bushel, as of 0250 GMT, after climbing to its highest since July 5 at $13.76 a bushel earlier in the session.
Corn Cv1 added 0.8% to $5.05-1/4 a bushel and wheat Wv1 gained 0.2% to $6.61-3/4 a bushel.
Analysts expect the USDA in a monthly supply/demand report due on Wednesday to cut its forecast for the U.S. soybean harvest, after the agency slashed its plantings estimate in a June 30 acreage report. Soybean ending stocks for the 2023/24 marketing year are expected to tighten as well.
Soybean Futures
Soybean futures rose on Tuesday after the USDA rated 51% of the U.S. soy crop in good-to-excellent condition, up from 50% last week but below analysts' average estimate of 52%.
In Illinois, the top U.S. soybean producer, 36% of the crop was rated good to excellent, up from 30% the prior week but still among the lowest ratings in the Midwest crop belt.
For corn, analysts expect only modest changes to the USDA's production and 2023/24 ending stocks forecasts, while sluggish demand for the grain remains a worry as farmers in Brazil continue to harvest a bumper corn crop.
Commodity funds were net buyers of CBOT soybean, wheat, soymeal and corn futures contracts on Tuesday and net sellers of soyoil futures, traders said.
