Chicago | Reuters — U.S. wheat futures slid to a four-month low on Tuesday as the country’s advancing harvest increased supplies, while soybean futures dropped on better-than-expected U.S. crop conditions.
Weather conditions are expected to improve for the wheat harvest in the U.S. Plains after recent rains slowed progress.
The U.S. Department of Agriculture said in a weekly crop report on Monday that harvest was 33 per cent complete, despite some rain delays. That topped analyst estimates for 28 per cent and the five-year average of 31 per cent.
“Upcoming rains won’t be heavy or prolonged,” said Rich Feltes, vice president of research for brokerage RJ O’Brien.
Front-month wheat futures closed down 1.5 per cent, or 8-3/4 cents, to $5.70-1/2 a bushel on the Chicago Board of Trade (all figures US$). The contract earlier hit $5.70, the lowest since Feb. 7.
Front-month soybean futures lost 0.8 per cent, or 11-1/4 cents, to $14.14-3/4 a bushel. Spot corn futures shed 0.4 per cent, or 1-3/4 cents, to $4.42-3/4 a bushel.
Traders are expected to adjust positions in the markets before USDA on June 30 issues separate estimates for crop plantings and grain stocks as of June 1.
USDA will likely increase its estimate for corn seedings by 0.04 per cent from March to 91.725 million acres and its estimate for soybean seedings by 0.8 per cent to 82.154 million, according to a Reuters survey of analysts.
“The market knows there is a lot of corn coming and that will set a lower tone for prices as we head toward harvest,” said Kayla Burkhart, broker for SunPrairie Grain in North Dakota.
Condition ratings for corn and soy are expected to be steady or improve next week owing to favourable weather.
USDA last rated 72 per cent of the soy crop as good to excellent, down a percentage point from the prior week because of heavy rains but higher than most analysts had expected.
The corn crop was rated 74 per cent good to excellent, down two percentage points from the week before, but still above the five-year average of about 68 per cent for late June.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Sybille de La Hamaide in Paris.