U.S. grains: Wheat drops on outlook for Plains rains

Chicago | Reuters — U.S. wheat futures fell on Monday, led lower by a 1.9 per cent drop in K.C. hard red winter wheat amid forecasts for improving weather for crop development in key U.S. growing areas.

“The U.S. Plains were dry over the weekend, but the next precip(itation) chance is on the way later this week, with our lead forecaster looking for strong coverage of rains and some snow,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients. “Extended maps show continued precip(itation) chances for hard red winter wheat areas over the next two weeks.”

Corn futures followed wheat lower, with technical sellers entering the market as the yellow grain dropped below key support points on the chart.

Soybeans also closed in negative territory, giving up early gains and closing near session lows, after failing to push through last week’s highs.

Concerns about the massive soybean harvest in Brazil eating into overseas demand for U.S. exports in the coming weeks added further pressure to soybeans.

Chicago Board of Trade May soft red winter wheat futures dropped 6 cents at $4.30-1/4 a bushel (all figures US$). K.C. hard red winter wheat, which tracks the crop being grown in the U.S. Plains, was down 8-1/4 cents at $4.45-1/4 a bushel.

Forecaster Commodity Weather Group said in a note to clients that a wetter trend was expected across three-fourths of the U.S. Plains in the next two weeks, which will benefit the crop that just emerged from dormancy there.

CBOT May corn ended four cents lower at $3.63-1/2 a bushel; CBOT May soybeans were off 1/2 cent at $9.99-1/2 a bushel.

Brazil’s Abiove soy industry association pegged the country’s soybean crop, which is being harvested, at 107.3 million tonnes, up from its February forecast of 104.6 million tonnes. Brazil’s soy exports were seen at 59.8 million tonnes, 1.1 million tonnes larger than Abiove’s previous outlook.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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