Wheat falls after US crop seen in good condition
HAMBURG: Chicago wheat fell on Tuesday after the US Department of Agriculture (USDA) gave a good initial assessment of the current state of US crops.
Soybeans rose and corn was flat.
“Wheat has been weakened today by the first report of US winter wheat crop condition which was positive,” said Matt Ammermann, commodity risk manager with INTL FCStone.
“Soybeans are seeing some support from recent Chinese buying, but both soybeans and corn markets are awaiting more news about the US/China trade negotiations and US Midwest planting.”
Chicago Board of Trade May wheat was down 0.5 percent to $4.60-1/4 a bushel at 1104 GMT.
May soybeans rose 0.2 percent to $8.97-1/4 a bushel. May corn edged down 0.07 percent to $3.61-1/2 a bushel.
In its first crop condition report for this year on Monday, the USDA assessed 56 percent of US winter wheat in good/excellent condition, up from 32 percent a year ago and expectations of 55 percent.
“It was an encouraging first report although there is a long time to go before the harvest,” Ammermann said. “But over 50 percent of the crop in good-to-excellent state could indicate crop yields above the average trend line.”
Soybeans rose after the USDA said on Monday exporters sold 828,000 tonnes of US soybeans to China following previous sales on Friday.
“Soybeans are seeing support from the purchases by China in the US in past days,” Ammermann said. “But the volumes were still way below what the US needs to export so market reaction is limited.”
“I think both soybean and corn markets are getting tired about speculation over what could happen in the US/China trade negotiations and are awaiting more concrete news.”
“Corn markets are drifting as more precise indications are wanted about how the wet weather in the US will actually impact corn sowings.”
Around 1 million acres (405,000 hectares) of US farmland were flooded after a storm left parts of nine major grain producing states under water, Reuters reported.
“Flooding from cyclone and rains across US Midwest are threatening to disrupt corn planting and shift more area to soybeans,” said Ole Houe of brokerage IKON Commodities. “This could be a real game changer.”
There are forecasts for more rain in the US Midwest after the flooding.
“Fresh forecasts for rain raised concerns about planting delays in the US Midwest, adding to the bullish tone in corn,” brokerage Allendale said.