GRAINS-US wheat edges up as China demand tightens market
* USDA raises China wheat import forecast to 8.5 mln T
* Corn, soy underpinned by adverse U.S. wheat outlook
* Weather more favourable for wheat in northern Europe
(Adds details, quotes)
LONDON, July 12 (Reuters) - U.S. wheat prices edged higher on Friday as strong demand from China was expected to tighten global supplies, while corn and soybeans eased slightly but remained underpinned by forecasts for hot, dry weather in the next few days.
September wheat on the Chicago Board of Trade stood 2 cents or 0.3 percent higher at $6.85 a bushel at 1108 GMT. The contract climbed to a two-week peak of $6.93 on Thursday.
In its July supply/demand report on Thursday, the U.S. Department of Agriculture (USDA) forecast China's wheat imports at 8.5 million tonnes in 2013/14, up 5 million tonnes on the month and up from 3.2 million in 2012/13.
It lowered its forecast for 2013/14 U.S. wheat ending stocks to 576 million bushels from its June projection of 659 million and below the average analyst estimate of 632 million.
China bought more than 1.3 million tonnes of U.S. wheat in early July in a flurry of deals after U.S. prices fell to near their lowest levels in a year.
"As a result (of higher China imports) global wheat stocks are expected to fall to their 2008/09 level with potential for further downward revision as the USDA's Russian wheat production forecast remains elevated," Goldman Sachs said in a market note.
"We expect that CBOT wheat prices will remain trading at a large premium over CBOT corn prices in the second half of 2013," the report added.
November milling wheat in Paris fell 1.00 euro or 0.5 percent to 198.25 euros a tonne.
European traders noted favourable weather was boosting crop prospects across much of northern Europe.
"Overall the wheat is developing well and if we get warm, sunny weather up to the expected harvest start in early August we should have a good harvest this summer," one trader based in Germany said.
CBOT November soybeans fell 0.2 percent to $12.88-1/4 a bushel, after hitting a 3-week top of $12.97 earlier in the session. The contract remained on track, however, for a gain on the week of nearly 5 percent.
The USDA pegged 2013/14 U.S. soybean ending stocks at 295 million bushels, above trade expectations but not a massive surprise.
"While the 2013/14 US corn and soybean inventories came in above expectations, the impact on prices was insignificant as the market remains focused on potentially adverse weather conditions in coming weeks," Goldman Sachs said.
"The forecast for hot and dry weather next week could impair corn pollination while recent wet conditions could limit double-cropped soybean planting," the investment bank added.
The USDA projected 2013/14 U.S. corn carryout at 1.959 billion bushels, above analysts' average forecast and the highest since 2005/06.
CBOT December corn was a marginal 1/2 cent or 0.1 percent lower at $5.26-1/2 a bushel. It remains on course, however, for a weekly gain of about 7 percent.
"With old crop corn stocks still relatively tight, the market will continue to price in additional premiums for weather risk as we transition through a crucial stage of crop development," Rabobank said in a market note.
(Additional reporting by Naveen Thukral in Singapore and Michael Hogan in Hamburg; editing by Keiron Henderson)