GRAINS-Wheat prices hit 2-wk high as USDA lowers Russian forecast

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SYDNEY - U.S. wheat futures edged up to hit a two-week high on Wednesday as the U.S. Department of Agriculture lowered its estimate for Russian production following prolonged dry weather.

FUNDAMENTALS

The most active wheat futures on the Chicago Board of Trade were up 0.2 percent at $5.35-3/4 a bushel by 0034 GMT. They earlier hit their strongest since May 29 at $5.39 a bushel, having closed up 3.9 percent on Tuesday.

The most active soybean futures were up 0.1 percent at $9.55 a bushel, having closed little changed on Tuesday when prices hit their lowest since Jan 12 at $9.52 a bushel.

The most active corn futures were up 0.1 percent at $3.78 a bushel, after gaining 2.8 percent in the previous session.

The USDA raised its estimate of all U.S. wheat production for 2018/19 by 6 million bushels to 1.827 billion bushels, but it cut its Russia wheat harvest estimate to 68.50 million tonnes from 72.00 million tonnes.

Australia on Wednesday cut its forecast wheat production by nearly 8 percent for 2018/19 as prolonged dry weather across the country's east coast crimps national output.

The agency also lowered its forecasts for U.S. corn and soy ending stocks for the 2018/19 crop year that begins on Sept. 1.

The USDA late on Monday reduced good-to-excellent crop condition ratings for the corn and soy crops by 1 percentage point, but the ratings are still some of the best in years, while weekend rainfall in the Midwest also benefited crops.

MARKET NEWS

The dollar rallied against a basket of currencies on Tuesday ahead of Wednesday's Federal Reserve policy decision, while the British pound whipsawed after Prime Minister Theresa May defeated a rebellion in parliament over Brexit plans.

Oil prices were mixed on Tuesday, with U.S. crude settling higher before falling in post-settlement trading, and Brent slipping as investors prepared for a key meeting of the OPEC producer group next week.

U.S. stocks ended slightly higher on Tuesday, boosted by gains in technology and utilities shares, though investors were cautious ahead of the Federal Reserve's policy decision.