August 10, 2018 / 11:18 AM / 7 months ago

GRAINS-Wheat prices climb on tightening global supplies

* USDA due to issue monthly crop report at 1600 GMT

* Forecast for global wheat crop expected to be cut

* U.S. soy, corn production likely to be upwardly revised (Adds quotes, updates prices)

By Nigel Hunt

LONDON, Aug 10 (Reuters) - Chicago wheat futures were higher on Friday and set for their fourth consecutive weekly gain as adverse weather in major global exporters tightened supplies.

Dealers said a monthly report to be issued by the U.S. Department of Agriculture at 1600 GMT on Friday was likely to confirm the tightening in supplies.

“The main interest in USDA’s report will be on how severely it cuts global wheat production (forecasts),” said David Sheppard, managing director of UK merchant Gleadell.

“Against local estimates, a drop of 15 to 20 million tonnes would be justified, along with its need to adjust the export matrix, shifting a chunk of demand away from the EU and Black Sea into the U.S. export program.”

The Chicago Board Of Trade most-active wheat contract was up 0.4 percent at $5.66-3/4 a bushel at 1056 GMT.

Wheat is being underpinned by dryness curbing yields across key exporting nations in Europe and the Black Sea region.

Analysts at Strategie Grains made another steep cut to their estimate for this year’s European Union soft wheat harvest, citing parched conditions in northern Europe that have led to “catastrophic” yields in Germany and Scandinavia.

In a report on Thursday, the France-based firm projected EU soft wheat production at 127.7 million tonnes, compared with 132.4 million estimated a month ago and just under the 130 million it forecast in a late July update.

December milling wheat on Paris-based Euronext was up 1.00 euro, or 0.5 percent, at 214.00 euros a tonne.

Dealers said estimates for U.S. corn and soybean crops would also be closely scrutinized.

“Market expectations are that we could see the USDA revise higher (U.S. corn and soybean) production estimates. Crop progress reports have generally suggested that these crops are in good condition,” ING said in a market note.

After rains across the U.S. Midwest this week, parts of the region are expected to turn drier over the next two weeks at a critical stage of development for corn and soybean crops, forecasters said.

The CBOT’s most active soybean contract was down 0.4 percent at $9.00-3/4 a bushel while the most active corn contract was unchanged at $3.82-3/4 a bushel. (Additional reporting by Naveen Thukral; Editing by Vyas Mohan and Jan Harvey)

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