U.S. wheat futures fell two per cent on Tuesday as Russia sold large amounts of the grain to top global buyer Egypt in two back-to-back tenders within a week, calming fears that the world's No. 4 wheat exporter would soon curb exports.
Soybeans closed mixed after a choppy session, with new-crop November futures pressured by improving weather in the U.S. Midwest crop belt. Corn inched lower on profit-taking.
At the Chicago Board of Trade (CBOT), September wheat settled down 17 cents at $8.39-3/4 per bushel (all figures US$).
December corn ended down 3-1/4 cents, or 0.4 per cent, at $7.89 per bushel and November soybeans fell 2-3/4 cents, or 0.2 per cent, to $15.98 a bushel.
Front-month CBOT wheat broke chart support at $8.50 and dipped to $8.38-1/4, the lowest spot price since July 13.
Wheat futures fell after Egypt, the world's largest wheat buyer, bought 120,000 tonnes of wheat from Russia and Ukraine on Tuesday, three days after buying 120,000 tonnes of Russian wheat at its previous tender.
Russia has endured a drought that may cut its wheat harvest in the 2012-13 season by 20 per cent, to around 45.5 million tonnes. But the head of Russia's Grain Union last week said Russia will have enough grain for export and domestic consumption at least until the end of 2012.
Bids for the latest Egyptian tender showed U.S. wheat was priced higher than wheat from Russia.
"The immediate concern is they (Russia) are in the market, they are coming in at much lower values than the U.S. would be able to offer, and into important markets such as Egypt," said Shawn McCambridge with Jefferies Bache in Chicago.
However, traders and analysts said Russia's government could still impose restrictions on grain exports later in the year. The latest sales were for delivery in September, and some said offers of Russian wheat were scarce from October forward.
"The magnitude of the offers out of Russia and the aggressive pricing say to me... that some measure of export stricture will be imposed within 60 days, and as a consequence they want to move as much product out of port, or at least have the sales on the books, before that occurs," one CBOT trader said.
U.S. corn, soy ratings stabilize
Improved weather in the U.S. Midwest and stabilizing U.S. crop ratings kept a lid on the soybean and corn markets.
Soybeans fell despite a monthly industry report on the U.S. soybean crush that came in above trade expectations, indicating higher-than-expected domestic soy usage. The National Oilseed Processors Association reported the monthly U.S. soybean crush for July at 137.38 million bushels, above an average of trade estimates for 132.5 million.
Weather forecasts for the Midwest crop belt called for cooler temperatures and scattered rains, which could improve yield prospects for late-planted soybeans.
"While these rains have been too light to end the drought in most of the central and western Midwest, northern Delta, and central Plains, they have significantly slowed declines in crop condition ratings for both corn and soybeans," said Don Keeney, senior agricultural meteorologist for MDA EarthSat Weather/CropCast.
The U.S. Department of Agriculture late Monday said 30 per cent of the U.S. soybean crop was rated in good to excellent condition, up one percentage point from the previous week.
Weekly corn ratings were unchanged, with 23 per cent of the crop rated good to excellent, breaking a string of nine straight weeks where condition ratings dropped due to scorching temperatures and dry soils.
Still, ratings for both remained the lowest since 1988.
Grain markets have surged since June as the worst drought in half a century in the United States withered corn and soy crops. Supply concerns remain intense despite a pullback in prices since Friday when traders booked profits after a closely watched U.S. government report updated crop estimates.
CBOT December corn has fallen seven per cent from its all-time high of $8.49 a bushel set on Friday.
-- Julie Ingwersen covers agricultural commodities markets for Reuters in Chicago. Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.