Chicago | Reuters — U.S. grain and soybean futures extended losses on Tuesday as crops in the U.S. Midwest were poised to benefit from rains, traders said.
Technical selling and better-than-expected U.S. Department of Agriculture crop condition ratings added pressure on prices.
Showers in parts of the Midwest and Mississippi Delta temporarily eased concerns about the risk for damage to corn and soybeans from hot, dry weather.
Farmers are nervous about the health and size of their crops after heavy rains and flooding caused unprecedented delays in corn planting this spring. The planting problems left some crops with shallow root systems that make them more vulnerable to damage from unfavourable weather.
“All of the rain is providing beneficial moisture for late-developing summer crops,” USDA said in a daily weather update.
Most actively traded December corn on the Chicago Board of Trade (CBOT) fell 1.2 per cent to $4.41-1/4 a bushel (all figures US$). The declines extended a setback from Monday, when the most-active contract sank almost three per cent after hitting a five-year high.
Most-active November soybeans dropped 1.6 per cent, to $9.06 a bushel, while September wheat slipped 0.1 per cent, to $5.07-1/2 a bushel at the CBOT.
Follow-through selling weighed on the markets after Monday’s declines, traders said.
“These losses were instigated by technical selling yesterday, but improved weather outlooks added to the negativity,” said Karl Setzer, commodity market risk analyst for AgriVisor.
USDA surprised traders on Monday afternoon by raising its condition rating for U.S. corn to 58 per cent good to excellent in a weekly report. That was up from 57 per cent a week earlier and above market expectations for 56 per cent.
U.S. soybeans were rated 54 per cent good to excellent, up from 53 per cent last week and above analysts’ expectations for 53 per cent.
“The trade is now expecting another improvement in the condition rating again next week with the improvement in the weather forecast,” Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage, said about corn.
USDA on Monday said 57 per cent of the U.S. winter wheat harvest was complete, up from 47 per cent last week but below expectations of 62 per cent. U.S. spring wheat was rated 76 per cent good to excellent, behind market expectations of 78 per cent.
On Wednesday, wheat traders will assess the results of a tender from Egypt’s General Authority for Supply Commodities (GASC).
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Michael Hogan in Hamburg, Colin Packham in Sydney and Emily Chow in Kuala Lumpur.