Harvest upgrades

However, wheat witnessed the most sweeping changes, with the USDA factoring in tonne-for-tonne upgrades this week by Australian and Canadian officials to their estimates for domestic harvests, and plugging in a less-well-flagged raise hopes for the newly-started Argentine harvest too.

The revision left the Argentine harvest pegged at 14.5m tonnes, well above many in-country forecasts.

Julian Dominguez, Argentina's farm minister, last week estimated the crop at 13.5m tonnes, while the Buenos Aires grains exchange has it at 13.0m tonnes, and the Rosario grains exchange on Wednesday put it at 12.8m tonnes.

However, many traders have puzzled over the extent of Argentina's competitiveness on world wheat markets, which gained it orders from Egypt and Saudi Arabia this week, with one London analyst musing that it was down to a wish to gain hard currency.

Bumper supplies 

The USDA lifted its estimate for the world wheat harvest by 5.7m tonnes to 689.0m tonnes, beating the 2009-10 record.

And, with ideas for Argentine and Australian stocks coming into 2011-12 also raised, the estimate for end of season stocks were lifted by 5.9m tonnes to a 12-year high of 208.5m tonnes, despite improved ideas for wheat use by livestock farmers which tally with a rash of other comments this week.

For soybeans, the estimate for world stocks was raised by 980,000 tonnes to 64.5m tonnes, reflecting reduced forecasts for Chinese and European Union consumption.

'Structural weakness'

Among commentators, US Commodities termed the report "negative" adding that, with output hopes increased, it "highlights the structural weakness of the market".

"The last 18 months support has been from production shortfalls. World production is now on the increase," the broker said.

At Societe Generale, Michael Haigh acknowledged that the revisions had created "downside risks" to forecasts of soybean prices, returning above $12 a bushel and, in essence, staying there throughout next year.