U.S. grains: Wheat, corn, soy fall as USDA report nears

U.S. wheat futures fell one per cent to their lowest in nearly six weeks on Tuesday due to improving crop prospects in the U.S. Plains and declining demand on the export market, traders said.

Soybeans and corn also fell, with corn charting a fresh three-year low and soybeans notching their lowest since February 2012. Expectations that an upcoming U.S. government report will show huge U.S. production of corn and soybeans weighed on both commodities.

Wheat, which has fallen in four of the last five sessions, was the leader on the downside.

“Planting on wheat is starting to wind down. There have been no hitches or glitches,” said Dewey Strickler, president of Ag Watch Market Advisors. “Also, the pace of exports in wheat for about the past three, four or five weeks has been on the ropes.”

Trading volume was thin across the ag markets as many traders were waiting for the U.S. Agriculture Department’s monthly supply and demand reports, due on Friday, before staking out new positions.

“The grains are just biding time at this point,” Matt Zeller, director of marketing information at INTL FCStone, said in a note to clients.

Chicago Board of Trade December soft red winter wheat futures were down 6-3/4 cents at $6.56 a bushel (all figures US$). The session low of $6.55 was the lowest for the front-month wheat contract since Sept. 24.

USDA said Monday that 91 per cent of the wheat crop was planted as of Nov. 3 and that good-to-excellent ratings rose to 63 per cent from 61 per cent a week earlier. A year ago, only 39 per cent of the crop was rated good to excellent.

CBOT December corn dropped 1-1/4 cents to $4.25. The session low of $4.24 was the weakest price since Sept 1, 2010.

“Corn is still seeing negative momentum because of the large U.S. harvest coming in, but we are seeing some support from bargain buying as the lows were touched,” said Ole Hansen, head of commodity strategy at Saxo Bank. “The negative momentum in corn has been slowing a little. It seems the selling conviction is drying out a bit.”

CBOT January soybeans were down 6-1/4 cents at $12.50-1/4 a bushel. The expiring November contract was down 4-3/4 cents at $12.59-1/4 a bushel. The front-month contract’s low was the weakest since Feb. 24, 2012.

The harvest of the U.S. corn and soybean crops is nearing completion and is ahead of schedule after a slow start, a weekly USDA report said on Monday.

“U.S. farmers have taken advantage of good weather in the last couple of weeks,” said Luke Mathews, commodities strategist at Commonwealth Bank of Australia. “What we are also seeing is very good yield results continuing to come through, which signals that the USDA is likely to revise higher its U.S. corn production estimates.”

— Mark Weinraub is a Reuters correspondent covering grain futures markets in Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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