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GRAINS-Wheat hovers near 2-1/2-week low on ample global supply
April 20, 2017 / 2:42 AM / 8 months ago

GRAINS-Wheat hovers near 2-1/2-week low on ample global supply

* Argentina expects to harvest more wheat in 2017-18 season

* Firmer dollar eating into U.S. competitiveness - CBA (Adds comment, updates prices)

By Manolo Serapio Jr

MANILA, April 20 (Reuters) - U.S. grains futures were largely steady on Thursday although wheat hovered near a 2-1/2-week low, pressured by plentiful global supply that could curb demand for U.S. cargoes.

Chicago Board of Trade wheat for May delivery briefly touched $4.17-3/4 a bushel, a tad off Wednesday’s trough which was the lowest since March 31. It was steady at $4.19 by 0227 GMT.

“There are lots of wheat around,” said Kaname Gokon from brokerage Okato Shoji in Tokyo, adding he doesn’t see any weather threats to wheat production from Russia and the rest of the Black Sea region.

In Argentina, farmers are expected to harvest 17.5 million tonnes of wheat in the upcoming 2017-18 season compared with 16.3 million tonnes in 2016-17, the Buenos Aires Grains Exchange said in a report released on Wednesday.

Commonwealth Bank of Australia analyst Tobin Gorey said U.S. wheat exports for the 2016 season looked likely to be, at best, 1 million tonnes below the USDA’s current forecasts “unless there are chunky late sales.”

Gorey also said the firmer dollar is “eating into U.S. competitiveness against almost every other major competitor with the exception of the European Union.”

Chicago corn was also flat at $3.61-3/4 per bushel while soybeans eased 0.2 percent to $9.48-1/2.

Cheaper corn and soybeans from big producers such as Brazil is cutting demand for U.S. cargoes, said Gokon. He said he sees further downside for U.S. prices over the next months.

The Brazilian government will offer up to $159 million in subsidies to help corn producers sell their large crop in the 2016/17 cycle. (Reporting by Manolo Serapio Jr.; Editing by Subhranshu Sahu and Gopakumar Warrier)

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