October 2, 2017 / 11:46 AM / in 2 months

GRAINS-Chicago wheat extends fall on higher U.S. crop estimate

* US wheat falls as USDA raises supply forecast

* Weak euro underpins European wheat prices

* Soybeans dip after rally, Brazil planting in focus (Adds quotes, updates prices)

By Nigel Hunt

LONDON, Oct 2 (Reuters) - Chicago wheat futures fell to the lowest level in almost two weeks on Monday, weighed down by a larger-than-expected estimate for the U.S. crop and a stronger dollar, while soybean and corn prices also eased.

The U.S. Department of Agriculture on Friday reported U.S. 2017 production of spring wheat other than durum at 416 million bushels, up from its previous estimate of 402 million bushels and well above analyst estimates.

“Amid the drought in the spring wheat growing regions in the early summer and reports of an abandonment of acreage, a downward revision to 382 million bushels had been expected. The effects on the crop were apparently not so serious after all,” Commerzbank said in a market note on Monday.

The Chicago Board of Trade most-active wheat contract was trading 1.1 percent lower at $4.43-1/2 a bushel at 1103 GMT, after dropping earlier in the session to it lowest since Sept. 20 at $4.43-1/4 a bushel.

“The USDA keep surprising us,” said one India-based commodities analyst. “We were expecting farmers to have abandoned large areas planted with spring wheat in the United States. Now it looks like that was not the case.”

The government put the U.S. all-wheat crop at 1.741 billion bushels, above the average trade estimate of 1.718 billion bushels.

European wheat futures were underpinned by a decline in the euro after a violence-marred independence vote in Spain’s Catalonia region.

December milling wheat futures were unchanged at 166.00 euros a tonne.

Australia’s wheat production is likely to fall to its lowest since 2007/2008 amid persistent dry weather, missing official forecasts made earlier this month as well as the USDA’s latest estimate, a Reuters poll showed.

CBOT soybean futures fell back after climbing on Friday, weakened partly by a stronger dollar.

The most active contract was down 0.5 percent at $9.63-3/4 a bushel.

Brazilian soybean producers had planted 1.5 percent of the 2017/18 crop through Sept. 28, below the level of 4.8 percent at this time last year, consultancy AgRural said in a statement on Friday.

The current planted area is also below a five-year average of 2.3 percent, AgRural said, citing scarce rains in key producing regions.

In its quarterly stocks report released on Friday, the USDA showed U.S. demand for corn and soybeans was very strong during June, July and August but farmers and grain handlers were still left with corn stocks at a 29-year peak and soybean stocks at a 10-year high.

CBOT’s most active corn contract was down 0.35 percent at $3.54 a bushel. (Additional reporting by Naveen Thukral; Editing by Joseph Radford and Edmund Blair)

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