GRAINS-Wheat holds near 3-1/2 month low on USDA forecast

SYDNEY, June 12 (Reuters) – U.S. wheat traded in a tight range in early business on Thursday, just above a 3-1/2 month low touched in the previous session, after the U.S. Department of Agriculture pegged U.S. and global ending stocks above market expectations.

FUNDAMENTALS

* Chicago Board Of Trade front-month wheat was unchanged at $5.89-1/4 a bushel, having earlier touched a low of $5.87-3/4, the lowest since February 28. Wheat closed down 2 percent on Wednesday.

* Spot soybeans were steady at $14.44-3/4 a bushel, having slid 1.2 percent on Wednesday when prices hit a low of $14.42 a bushel, the weakest since March 31.

* Front-month corn was also steady at $4.40-3/4 a bushel, having closed down 1.1 percent on Wednesday when prices hit a low of $4.39-1/4 a bushel, the lowest since February 14.

* USDA lowered its estimate of U.S. 2014 winter wheat output to 1.381 billion bushels, from 1.403 billion in May, reflecting losses in the drought-hit U.S. Plains. But the shortfall was easily overshadowed by increased wheat production forecasts for India, the European Union, China and Russia.

* USDA trimmed its 2013/14 soybean ending stocks forecast by 5 million bushels based on a higher crush. Record high imports will help U.S. soybean crushers limp through to harvest.

* World corn and coarse grain stocks are also on the rise. USDA increased its 2013/14 corn production estimates for Brazil and India.

MARKET NEWS

* The dollar edged lower against a basket of major currencies on Wednesday for the first time in four sessions after traders dismissed expectations of an early Federal Reserve rate hike, while the yen advanced on few signs of further easing from the Bank of Japan.

* Brent oil futures climbed toward $110 a barrel on Wednesday as violence in Iraq prompted worries about the supply outlook, while U.S. crude struggled to make gains near key levels of resistance.

* U.S. stocks fell on Wednesday, with the Dow breaking a four-day string of record closing highs, following the World Bank’s reduction of its global growth forecast.

DATA AHEAD (GMT)

0645 France

Current account

April

0900 Euro zone Industrial production

April

1230 U.S.

Import prices

May

1230 U.S.

Export prices

May

1230 U.S.

Retail sales

May

1230 U.S.

Weekly jobless claims

1400 U.S.

Business inventories

April

Grains prices at 0023 GMT Contract

Last

Change Pct chg Two-day chg MA 30 RSI CBOT wheat

589.25

0.00 +0.00%

-3.80%

667.02 19 CBOT corn

440.75

-0.25 -0.06%

-2.27%

481.24 24 CBOT soy

1444.75

-0.75 -0.05%

-0.84%

1478.68 29 CBOT rice

$14.13

$0.00 +0.00%

-0.14%

$15.05 21 WTI crude

$104.37 -$0.03 -0.03%

+0.02%

$102.27 68 Currencies

Euro/dlr

$1.353 -$0.001 -0.10%

-0.43% USD/AUD

0.938

0.001 +0.10%

+0.28% Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential (Reporting by Colin Packham; Editing by Ed Davies)

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