GRAINS-Wheat eases after USDA warns of steep drop in harvest

Beijing, May 13 (Reuters) - Chicago Board of Trade wheat fell on Wednesday after climbing to its daily trading limit in the previous session, following the U.S. Department of Agriculture's estimate that the nation's harvest will drop to the lowest level since 1972.

Corn rose while soybeans were almost flat.

FUNDAMENTALS

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 fell 0.7% to $6.74-1/4 a bushel by 0120GMT, corn Cv1 added 0.2% to $4.81 a bushel, and soybeans Sv1 remain unchanged at $12.27 a bushel.

Wheat rallied by its daily trading limits on Tuesday. The contract set a new high since October 2024.

Drought in parts of the US Great Plains has been threatening wheat output in the key production region.

Farmers will produce 1.561 billion bushels of wheat, the lowest since 1972, as the severe drought in the U.S. Plains was likely to slash the hard red winter wheat crop by 25% from a year earlier, the USDA said Tuesday.

Growers in the drought-hit Plains will harvest the smallest crop since 1957, the government said.

U.S. soybean stocks were forecast to shrink to 310 million bushels by the end of the 2026/27 marketing year, from 340 million at the end of the current season on August 31, USDA said.

Traders were waiting to see the results of U.S. President Donald Trump's high-stakes summit with Chinese leader Xi Jinping this week.

China and the U.S. may reach a farm deal that expands Beijing's purchases of grains and meat, but market watchers said they did not expect major new soybean purchases beyond those agreed to in a deal last October.

MARKET NEWS

DATA/EVENTS (GMT)

0645 France CPI (EU Norm) Final MM, YY Apr

0645 France CPI MM, YY NSA Apr

0900 EU GDP Flash Estimate QQ,,YY Q1

1230 US PPI Machine Manufacturing Apr