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Markets remain under intense pressure

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Wheat futures in Chicago continued to fall on Friday, hitting a two-month low, and corn and soybeans traded near three-year lows after official forecasts of higher U.S. grain inventories next season added fresh pressure to supply.

Expectations of a third consecutive big wheat harvest in Russia and competition from other Black Sea countries in an import auction from Egypt also weighed on the wheat market.

We recall that the Egyptian state buyer GASC claimed 180,000 tons of wheat from Ukraine and Romania in an auction on Thursday, strengthening the competitiveness of the region, even outside of Russia.

At its annual outlook forum, the USDA forecast U.S. wheat stocks will rise to 769 million bushels by the end of the 2024/25 marketing year, the largest amount in four years.

"Overall, the USDA paints a complicated picture for US wheat supplies, which in itself should put pressure on wheat prices," Commerzbank analysts commented.

The Agriculture Department also said U.S. corn stocks will rise to 2.532 billion bushels by the end of 2024/25, a record on par with the 1987/88 season.

For soybeans, the agency expects ending stocks to rise to 435 million bushels, the highest level since 2019/20.

However, market reaction may change as market participants await clearer evidence of trends and await more detailed forecasts for 2024/25 from the USDA, Commerzbank said.

The agency forecast large supplies despite expectations that farmers will sow less wheat and corn for this year's crop.

The USDA's chief economist said U.S. soybeans will face slowing demand from top importer China and strong competition from South America.

Recent rains in Argentina and Brazil have eased concerns about potential losses from heat and drought.

In wheat, consultancy SovEcon raised its forecast for this year's Russian crop, unlike its peers at IKAR, which did not change its size from last month's forecast.

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