U.S. grains: Wheat drops on weather forecast

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– U.S. wheat futures sank 3.2 per cent on Tuesday, on track for their biggest daily decline in four weeks as forecasts called for improving harvest conditions for the winter crop good weather for spring wheat development.

“Drier weather begins to develop in the southern Plains starting this weekend to improve harvest conditions,” Commodity Weather Group said in a note to clients. “Weekend rains and additional chances in the next two weeks are continuing to ease dry spots for now in spring wheat areas.”

Corn and soybean futures fell on pressure from technical selling after overnight strength failed to push prices above highs hit late last week.

Both corn and soybeans posted monthly gains, the second in a row for corn and the third in a row for soybeans. Wheat was set for its first monthly loss since February.

The most-active soybean contract on the Chicago Board of Trade was up 4.7 per cent for the month. Corn gained 3.4 per cent in May, while wheat was down 4.6 per cent for the month.

CBOT July wheat futures closed down 17 cents at $4.64-1/2 a bushel (all figures US$). Prices had shown strength during overnight trading before hitting resistance as they neared the high end of the 20-day Bollinger range.

CBOT July corn fell eight cents to $4.04-3/4 a bushel and CBOT July soybeans dropped eight cents to $10.78-1/2 a bushel.

Good growing conditions across much of the U.S. Midwest sparked some of the selling by speculators, said Chad Henderson, a grain market advisor from Prime Agricultural Consultants.

“Weather through the heart of the Corn Belt is pretty decent,” Henderson said.

The U.S. Department of Agriculture is due to release its first crop condition ratings for this year’s domestic corn crop in its weekly crop progress report due later on Tuesday. Analysts were expecting good-to-excellent ratings of 71 per cent.

But declines in corn and soybeans were kept in check by ongoing concerns about the size of the South American crop. Harvest delays in Argentina were boosting export demand for U.S. soybeans.

USDA early on Tuesday said private exporters sold 213,000 tonnes of U.S. soybeans to unknown destinations, 73,000 tonnes for 2015-16 delivery and 140,000 tonnes for 2016-17.

Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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