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 and soybeans rose.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 fell 0.6% to $6.27-1/4 a bushel by 0230GMT, corn Cv1 added 0.3% to $4.81-1/2 a bushel, and soybeans Sv1 gained 0.1% at $12.28-1/2 a bushel.

Wheat rallied to its daily trading limits on Tuesday. The contract set a new high since October 2024. Drought in parts of the U.S. 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.

Traders have been closely monitoring U.S. President Donald Trump's high-stakes summit with Chinese leader Xi Jinping this week. The two countries may reach a farm deal that expands Beijing's purchases of grains and meat, but market watchers said major new soybean purchases beyond those agreed last October are unlikely.

War-related risk premiums and uncertainty over Chinese demand will be key forces shaping grain markets in the months ahead, U.S. consultancy AgResource said on Tuesday. The agency forecasted a record soybean crop but lower wheat and corn output this season.

In the Black Sea grain belt, Ukraine expects a 60.4 million metric ton crop this year, near last year's level despite war and a cold, wet spring, the country's government said Tuesday. Russian wheat export prices were mostly flat last week on quiet holiday trade, with analysts citing weaker seasonal demand and negative exporter margins amid a strong rouble.