Soybeans at 22-month lows as Argentina upgrades production outlook

CANBERRA, Oct 12 (Reuters) - Chicago soybean futures held near 22-month lows on Thursday as an upgrade to Argentina's projected harvest raised expectations of plentiful supplies from South America, with traders shrugging off an expected downgrade for the U.S. crop outlook.

Wheat was unchanged as a flood of cheap grain from Russia continued to dominate the market, keeping prices close to last month's three-year low.

Corn futures fell slightly.

FUNDAMENTALS

* The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.1% at $12.53-1/2 a bushel by 0042 GMT. Wheat was flat at $5.56 a bushel and corn fell 0.1% to $4.87-3/4 a bushel.

* CBOT soybeans have fallen 11% since late August amid record supply from Brazil and the start of the U.S. harvest. On both Wednesday and Thursday, the contract hit $12.51 a bushel, the lowest since December 2021.

* Argentina's Rosario grains exchange said the country's soybean harvest could reach 50 million metric tons, having earlier predicted 48 million tons.

* Argentine production adds to an estimated 154.6 million ton harvest in Brazil, the largest ever. Brazil is the world's biggest soybean exporter and expects an even bigger crop next year.

* In the U.S., the No. 2 soybean exporter, analysts expect the U.S. Department of Agriculture in its Agricultural Supply and Demand Estimates (WASDE) report on Thursday to trim forecasts for U.S. soybean and corn production and yields.

* In a sign of strong demand that failed to lift prices, the USDA also on Wednesday reported U.S. export sales of 121,000 tons of soybeans to buyers in China and 213,000 tons to unknown buyers.

* For wheat, the Rosario grains exchange revised its forecast for Argentina's 2023/24 harvest to 14.3 million tons from 15 million tons after dry weather hit crops.

* However, reports from traders that Egypt bought around 480,000 tons of Russian wheat on Tuesday have kept market focus on Russia's huge wheat surplus and exports, which have driven prices lower.

* "There was some talk of Russian FOB values being offered out at $225-$229 (a ton), which would be below the perceived price floor of $240 and thus a bearish factor for flat price," analysts at brokerage StoneX wrote in a note.

* Also pressuring prices are analyst expectations that the USDA will on Thursday peg U.S. wheat ending stocks at 0.647 billion bushels, up from its 0.615 billion bushel projection in September.

* Farm office FranceAgriMer upgraded its forecast for French soft wheat shipments outside the European Union in 2023/24 to 9.80 million tons from 9.50 million tons projected last month.

* In Ukraine, however, grain exports are down 27.6% to 7.42 million metric tons so far in the 2023/24 July-June season, agriculture ministry data showed. Russia has blockaded and attacked Ukrainian ports.

* Commodity funds were net sellers of Chicago soybeans, soyoil and wheat on Wednesday and net buyers of corn, traders said.

MARKETS NEWS

Global stock indexes rose on Wednesday as minutes from the last U.S. Federal Reserve meeting showed policymakers on cautious footing last month, while benchmark 10-year Treasury notes fell to about a two-week low as fighting continued between Palestinian militants and Israel. (Reporting by Peter Hobson; Editing by Rashmi Aich)