Wheat extends slide as supply concerns ease, virus fears grow

Corn, soybeans also slip

  

PARIS/SINGAPORE- Chicago wheat prices fell to their lowest in more than two weeks on Tuesday as a forecast for a record Australian production tempered global supply concerns while fresh investor jitters about the Omicron coronavirus variant further weighed on grains.

Corn and soybeans also slipped, pressured by falling crude oil after Moderna's chief executive cautioned that COVID-19 shots were unlikely to be as effective against the Omicron variant.

The most-active wheat contract on the Chicago Board Of Trade (CBOT) was down 1.5% at $8.10 a bushel by 1232 GMT. It earlier fell to $8.02-1/2, its weakest since Nov. 11.

In Europe, March wheat BL2H2 on Paris-based Euronext was down 1.8% at 292.25 euros ($331.62) a tonne.

Wheat markets rallied to nine-year highs this month in Chicago and record peaks on Euronext as the possibility of more Russian export restrictions and the risk of rain damage to Australia's crop fanned fears of tight milling wheat supplies.

But this week's upward revision by Australia's chief commodity forecaster ABARES to its official estimate for the 2021/22 crop, now expected at a record 34.4 million tonnes, cooled sentiment.

"These figures are above expectations and confirm that rains have been beneficial on volumes," consultancy Agritel said.

The U.S. Department of Agriculture (USDA), meanwhile, in its last weekly crop progress report for 2021 on Monday rated 44% of U.S. winter wheat in good-to-excellent condition, steady from the previous week and above average trade expectations of a slight decline. 

However, some analysts see wheat as well supported fundamentally, with logistical constraints and mixed crop quality seen limiting the extent to which Australia can make up for dwindling availability of milling-grade wheat.

Egypt's state grains buyer, the General Authority for Supply Commodities, on Monday bought 600,000 tonnes of wheat in an international tender for Jan. 9-20 shipment. 

CBOT soybeans gave up 1.0% to $12.29-1/4 a bushel and corn was down 1.2% at $5.75-1/2 a bushel.

The U.S. corn and soybean harvests are virtually complete, with the USDA reporting both crops as 95% harvested by Nov. 21, and attention is turning to the South American growing season, where a La Nina weather pattern could stress crops in Argentina and southern Brazil.

($1 = 0.8813 euros)

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Kirsten Donovan) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))


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