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CBOT wheat, corn ease after USDA sparked rally on supply concerns

(Adds closing prices)

By Tom Polansek

CHICAGO, May 13 (Reuters) – Chicago Board of Trade wheat and corn futures weakened on Friday, a day after rising on U.S. Department of Agriculture forecasts that indicated tightening global supplies.

Traders took some profits ahead of the weekend and on expectations that U.S. farmers are advancing corn plantings thanks to improved Midwest crop weather, analysts said. The USDA is slated to issue a weekly update on planting progress on Monday.

Markets remain nervous about tightened grain supplies, though, due to global crop shortfalls and Russia’s invasion of Ukraine, a major wheat and corn exporter, analysts said.

“There is zero tolerance for crop problems in the U.S. this summer,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa, about corn.

The most-active Chicago Board of Trade soft red winter wheat contract ended down 1-1/4 cents at $11.77-1/2 a bushel after earlier hitting a two-month peak. K.C. hard red winter wheat and MGEX spring wheat futures extended gains and set new highs in the July contracts.

Most-active CBOT corn closed 10-1/4 cents lower at $7.81-1/4 a bushel, while soybeans finished up 32-3/4 cents at $16.46-1/2 a bushel.

Strength in crude oil and equities, along with hopes for increased U.S. export demand to China, helped lift soy futures, analysts said. The USDA reported sales of 132,000 tonnes of U.S. old-crop soybeans to China, the world’s top importer of the oilseed.

The USDA ignited a rally in wheat futures on Thursday by projecting a six-year low for world stocks next season in a monthly crop report. Traders were surprised by a lower-than-expected 2022/23 production estimate for U.S. hard red winter wheat, which suffered heat damage.

The report reflected “an increasingly tense context linked to the double effect of climatic hazards and tensions on the Black Sea,” consultancy Agritel said.

Analysts said hot weather could continue to trim the U.S. hard red winter wheat harvest, while rains have delayed spring wheat plantings in the northern U.S. Plains. (Reporting by Tom Polansek in Chicago and Gus Trompiz in Paris; Editing by Shinjini Ganguli, Richard Chang and Sandra Maler)

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