CANBERRA, Feb 16 (Reuters) - Chicago wheat futures dropped on Friday and headed for their biggest weekly fall since last September after the U.S. government forecast larger-than-expected inventories as exporters struggle to compete with cheap Russian grain.
Soybean futures edged higher, while corn fell, with the U.S. Department of Agriculture (USDA) raising its stock projections for both crops.
FUNDAMENTALS
* The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.7% at $5.63 a bushel by 0117 GMT, and has lost nearly 6% so far this week, with prices nearing September's three-year low of $5.40.
* CBOT soybeans rose 0.2% at $11.64-1/2 a bushel, but were down around 1.5% for the week. In the previous session, the contract hit $11.60, its lowest since December 2020.
* CBOT corn fell 0.2% to $4.16-3/4 a bushel, also its lowest since December 2020, and was on track for a weekly loss of nearly 3%.
* At its annual outlook forum, the USDA predicted that U.S. wheat stocks would rise to 769 million bushels by the end of the 2024/25 marketing year, up 17% from a year earlier and the most in four years.
* The USDA also said U.S. corn stocks would balloon to 2.532 billion bushels by the end of 2024/25, up 17% from 2023/24 and the most since the 1987/88 season.
* For soybeans, the agency said ending stocks should climb 38% to 435 million bushels, the highest since 2019/20.
* The USDA's forecasts for wheat and soybean ending stocks significantly exceeded analysts' expectations.
* The USDA also said U.S. farmers would plant less corn and more soybeans in 2024 than they did a year earlier and forecast record soybean production of 4.505 billion bushels.
* The USDA's chief economist said U.S. soybeans would face slowing demand from top importer China and steep competition from South America. Top wheat exporter Russia, meanwhile, expects a third consecutive huge harvest this year, which should maintain the pressure on prices.
* U.S. farm incomes are forecast to fall sharply in 2024 for a second consecutive year.
* Commodity funds have bet heavily that Chicago wheat, soybean and corn prices will fall further and were net sellers of all three again on Thursday, traders said.
* The International Grains Council (IGC) raised its forecast for 2023/24 global corn production to a record high, but also lifted its demand estimate.
* Consultants Strategie Grains trimmed their forecast for 2024 soft wheat production in the European Union to 122.6 million metric tons from 122.7 million.
* The combined Ukrainian grain and oilseed harvest may fall 15% to 20% in 2024 because of a smaller sowing area, the Kyiv-based UCAB business association said.
* Egypt's state grains buyer, the General Authority for Supply Commodities, said it had bought 180,000 metric tons of wheat in a tender.
MARKETS NEWS
* Global stock indexes advanced, Treasury yields declined and the dollar weakened against the Japanese yen on Thursday after a larger-than-expected drop in U.S. retail sales in January prompted a repositioning of expectations for interest rate cuts. (Reporting by Peter Hobson; Editing by Sherry Jacob-Phillips)
