Soybeans steady as top producer Brazil raises harvest estimates

Chicago soybean futures inched up on Wednesday but were stuck below last week's five-month high after data showed that bean processing had slowed in the U.S. and the crop agency of top exporter Brazil raised its harvest forecast.

Wheat futures rose as traders weighed the effect of adverse weather on crops in Russia, the biggest shipper of the grain, and corn also gained.

The most-active soybean contract on the Chicago Board of Trade (CBOT) ZS1! was up 0.2% at $12.17 a bushel by 0424 GMT, with CBOT wheat ZW1! 0.8% higher at $6.78 a bushel and corn ZC1! up 0.4% to $4.69-1/4 a bushel.

Plentiful supply pushed all three contracts to their lowest levels since 2020 earlier this year but prices have recovered some ground due to adverse weather and a leafhopper insect plague in Argentina's corn fields.

Soybeans are up around 8% from this year's lows, with corn up around 16% and wheat up nearly 30%.

Brazil's Conab revised its forecast for the country's 2023/24 soybean harvest by 1.16 million metric tons to 147.685 million tons despite flooding in Rio Grande do Sul, the second largest soy producing state.

Cheap Brazilian supply continues to out-compete U.S. beans, putting downward pressure on Chicago futures prices.

Traders will be focused in the coming weeks on whether the large acreage planted in Brazil will make up for crops lost in the floods, said Andrew Whitelaw, an analyst at Episode 3 in Canberra.

"Talk of a ceasefire in the Middle East could also see oil prices coming under pressure, which could flow through to oilseed pricing," he said. Brent crude BRN1! has fallen around 10% from a peak in April.

Meanwhile, U.S. soybean processing slowed in April from a record crush in March due to narrowing margins and seasonal downtime at processing plants, analysts said ahead of an industry report on Wednesday.

The Biden administration announced tariff increases on an array of Chinese imports but not on Chinese used cooking oil, disappointing traders who had bid up prices amid rumours that it would be included, leading to greater usage of U.S. soyoil to make renewable fuels.

In wheat markets, Russia's nominee for agriculture minister said the country had lost crops sown on roughly 500,000 hectares this year due to bad weather but that Russia has sufficient resources to replant them.