Wheat and corn hover near lows as supply pressure builds

Chicago wheat futures hovered just above a five-year low on Wednesday, while corn held around contract lows as ample global supply hung over the cereal markets.

Soybeans edged higher, recovering from a four-month low with help from a bounce in crude oil.

The most active wheat contract on the Chicago Board of Trade (CBOT) ZW1! was down 0.2% at $5.07-1/2 a bushel at 1137 GMT, a touch above a near five-year low of $5.06-1/4 struck in May.

CBOT December corn (CZ25) was down 0.1% at $4.01-1/2 a bushel. It earlier touched a latest contract low at $4.01-1/4 as it continued to test the psychological $4 floor.

"With U.S. corn crop potential still looking very strong, ongoing wheat harvest pressure in the Northern Hemisphere, and no major concerns in the Southern Hemisphere, funds appear willing to continue adding to their short positions," Donatas Jankauskas, analyst with commodity data platform CM Navigator, said in a note.

Funds have been net sellers of Chicago wheat for the last six trading sessions, traders say.

Northern Hemisphere production is still pouring onto the market, with talk that crop from central Russia is reaching ports to ease concerns about availability after poor early harvest results in southern Russia, traders said.

There were question marks about wheat quality in Russia as well as northern Europe, but volumes appeared ample in the face of moderate demand.

"Quality can be a problem in some areas, but quantity is more than enough," Rabobank analyst Vitor Pistoia said of wheat.

"We don't have much that can stop us from going to $5."

Recent rainfall has also boosted the outlook for subsequent harvests in Canada, Australia and Argentina.

Wheat was further facing knock-on pressure from corn, against which it competes for livestock feed demand.

The U.S. Department of Agriculture (USDA) on Monday issued condition ratings that showed U.S. corn conditions were at their highest in nine years, reinforcing the prospect of a bumper U.S. harvest as crops emerge from the crucial pollination period.

A big second-corn crop in Brazil is already flowing onto the market ahead of the autumn U.S. harvest.

CBOT soybeans ZS1! were up 0.3% at $9.93-3/4 a bushel, moving away from a four-month low at $9.86 touched on Friday and Monday.

Soybeans found some support from larger-than-expected weekly U.S. export inspections on Monday, though the absence of Chinese demand and a five-year high for U.S. crop conditions were curbing prices.

A rebound in crude oil, which influences crops like soybean oil used for biofuel, on Wednesday helped underpin soybeans.