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Grain futures edged lower during the European session on Thursday. Soybeans and corn remained fairly unchanged, while wheat made a moderate retreat amid ample global supply outlook.

On the Chicago Board of Trade, corn futures for December delivery traded at $4.7913 per bushel at 11:36 GMT, down 0.27% on the day. Prices ranged between days high and low of $4.8238 and $4.7838 per bushel respectively. The grain plunged 1.26% on Wednesday and extended its weekly decline to 3.0% after adding 6.3% in the preceding two five-day periods.

Corn dropped for a third day as damage caused by the forecast dry and hot weather may be limited because the crop has passed its pollination development stage. DTN said in a report yesterday that the dry weather “favors any early-maturing crops” while stressing late-maturing crops including soybeans.

Frank J. Cholly, a senior commodities broker at RJO Futures in Chicago, said for Bloomberg: “It’s so late in the game that we’re not going to change the yield in corn as much as we could on beans. The weather in the next couple of weeks is going to be critical for soybeans. The dry weather may actually be more beneficial to corn than it is bad.”

Soybeans also posted a minor decline on the day but remained on track to mark their best monthly performance since July last year. Soybeans for November delivery traded at $13.7088 at 11:37 GMT, down 0.10% on the day. Prices held in range between days high and low of $13.8213 and $13.6150 a bushel respectively. The oilseed rose by 0.1% on Wednesday but trimmed its weekly advance to 0.6% following Thursdays retreat.

Despite the minor decline, soybeans are still set for their best month in more than a year as hot and dry weather continued to add stress to filling soybeans. DTN said in its report yesterday that the highest risk to crops was in areas which have been dry for most of the summer such as much of Iowa and west-central areas in Illinois.

Michael Pitts, a commodity sales director at National Australia Bank Ltd., said for Bloomberg: “The soybean crop, and corn to a lesser extent, are in a critical period to receive moisture. Certainly there are concerns over the U.S. soybean crop because of the consistent dryness.”

On August 12, the USDA reduced its U.S. corn output forecast to 13.763 billion bushels, 1.3% below its July estimate at 13.950 billion. Stockpiles are also poised to drop and will equal 1.837 billion bushels, 6% below July’s 1.959 billion projections. Soybeans production forecast was revised downward to 3.255 billion bushels, 5% below July’s 3.42 billion estimate, but still 8% higher than a year earlier. Yields expectations were also reduced and now stood at 42.6 bushels per acre, below the previous reading of 44.5 bushels and analysts’ projections for a 43.6 output per acre.

According to the Professional Farmers of America, which made a four-day tour of fields in seven Midwest states last week, soybean output may fall by 3% below USDA’s 3.255 billion bushels projections. Soybeans have fallen 1.8% this year amid ample supply outlook but prices jumped 15% in August as deteriorating weather conditions threatened yields. Meanwhile, corn production might contract by 2.2% below the government agency’s 13.763 billion bushels forecast but it is still expected to be record high.

The USDA said in its weekly crop progress report on Monday that corn condition has deteriorated last week, despite remaining a lot better than last year. As of the week ending August 25, 59% of the crop was rated good-excellent, compared to 61% a week earlier and 22% in the comparable period in 2012.

As for the soybeans crop, the government agency again marked a worsening in its condition. As of last week, 58% of the crop was categorized as “Good” and “Excellent”, below the preceding week’s 62% but still well above last year’s 30%. The USDA also reported that the blooming stage was nearing an end with 96% of the plants having bloomed as of August 25, compared to the five-year average of 98% and 2012′s 99% during the comparable week.

Elsewhere on the market, wheat futures traded at $6.5538 a bushel at 11:35 GMT, down 0.73% on the day. Prices shifted in a days range between $6.6350 and $6.5638 per bushel. The grain slipped 0.4% on Wednesday, trimming its weekly advance to 3.4%.

Wheat futures fell for a second day on Thursday as India, the worlds second-biggest producer, may resume exports after a three-month pause as a 19% fall in the rupee boosted the countrys competitiveness on the international markets. Tejinder Narang, an adviser with Emmsons International Ltd., said for Bloomberg that traders may export more than 1 million tons by March. This would pressure prices on the CBOT that have already fallen 27% this year amid ample global supply prospects. He also noted that shipments may further increase if the government reduced the export price of grains from its stockpiles.

Abdolreza Abbassian, an economist at the United Nations’ Food & Agriculture Organization, commented for Bloomberg yesterday: “The weak currency will make Indian wheat more competitive in the world market. There is potential to increase exports. To export more, or to be more competitive, Indian price has to be closer to the world market.”

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