Chicago | Reuters — U.S. soybean futures fell on Tuesday, setting back from their highest since Dec. 7 on dry weather in South America that will allow farmers to accelerate the harvest of what is expected to be a huge crop, traders said.
Wheat futures also closed lower, with traders reporting mild profit taking following the market’s run-up to a 5-1/2-week high on Monday, traders said.
Corn futures were close to unchanged.
“The support we have been getting has been from fund buying and short covering,” said Karl Setzer, market analyst with MaxYield Cooperative. “We just ran out of steam with that. There is just no reason to buy today. All in all, (it was) just kind of a risk-off type day.”
The U.S. Agriculture Department’s reports on crop conditions in the U.S. Plains added pressure to the wheat market but forecasts for some dry weather in the coming weeks limited the declines.
“Better conditions and weather concerns push and pull on the market,” CHS Hedging said in a note to clients.
USDA reported that crop conditions for winter wheat in Kansas, the top production state for the grain, held steady at 56 per cent good to excellent in the latest week. But that was up from 41 per cent a year earlier.
Oklahoma hard red winter wheat was rated 67 per cent good to excellent, up one percentage point from a week ago and 27 percentage points from a year earlier.
Chicago Board of Trade soft red winter wheat for May delivery settled 1-1/2 cents lower at $4.77-1/4 a bushel (all figures US$).
CBOT May soybeans were down 3-3/4 cents at $8.92 a bushel.
“Good South American harvest progress is expected for the next two weeks as much of Brazil and Argentina is forecast to see a drier bias evolve,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia in Sydney.
Brazil is in the middle of harvesting a massive soybean crop of about 100 million tonnes while Argentina is estimated to produce close to 58 million tonnes.
CBOT May corn dropped 1/4 cent to $3.68-1/2 a bushel. Traders noted support at the contract’s 50-day moving average.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.