CANBERRA, Dec 7 (Reuters) - Chicago wheat futures held steady on Thursday after a third large Chinese purchase of U.S. wheat in three days pushed prices to a four-month high in the previous session.
Soybeans and corn inched lower after falling on Wednesday as a rainy forecast in major exporter Brazil eased concerns about hot and dry conditions damaging crops.
FUNDAMENTALS:
* The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.1% at $6.33.3/4 a bushel by 0254 GMT after reaching $6.49-1/2 on Wednesday, its highest since Aug. 9.
* Wheat has gained about 12.5% since market open on Nov. 28.
* CBOT soybeans was down less than 0.1% at $12.95 a bushel and corn fell 0.1% to $4.84 a bushel.
* The United States Department of Agriculture (USDA) on Wednesday confirmed private sales of 372,000 metric tons of U.S. soft red winter (SRW) wheat to China.
* The sale took the amount of wheat the USDA has reported sold to China since Monday to more than 1 million tons, the biggest one-week total to China since July 2014 and close to the biggest ever.
* The sales caused a bout of short-covering by investors who had bet heavily on price falls. Commodity funds were net buyers of CBOT wheat on Wednesday, traders said.
* Meanwhile, the state of winter crops in Russia is better on average than last year, with only 4% in poor and thinned condition, a meteorological official said on Wednesday.
* For 2023, the agriculture ministry expects Russia to bring in its second-largest harvest, behind the 2022 record of almost 158 million tons. Plentiful cheap supply from Russia pushed CBOT wheat to a three-year low of $5.40 in September.
* In other crops, trade group Anec said Brazilian grain traders will export record volumes of both soybeans and corn in 2023, reflecting a bumper crop and strong demand from China.
* Anec said it expected Brazilian corn exports to reach 55.95 million metric tons, up 25% year-on-year, and soybean exports to reach 101.2 million tons, up about 30% from 2022.
* Corn and soybean were also pressured by weather forecasts predicting rain over the next two weeks for Brazil and parts of South America.
* Also pressuring corn and soybeans on Wednesday was a 3.8% plunge in U.S. crude oil futures to their lowest since June. Corn and to a lesser extent soy are used to make ethanol fuel.
* The soybean market brushed aside USDA confirmation of the sale of 136,000 metric tons of U.S. beans to China.
* Traders await updated crop estimates on Thursday from Brazilian government agency Conab as well as monthly supply/demand reports due Friday from the USDA.
* Analysts surveyed by Reuters expect the USDA to lower its estimates of Brazil's 2023/24 soybean and corn crops.
MARKETS NEWS
Asian shares slipped alongside Wall Street on Thursday, while a fall in oil prices to a five-month low promised to further reduce inflationary pressures and helped boost the global bond market.
(Reporting by Peter Hobson; Ediitng by Mrigank Dhaniwala)
