Chicago | Reuters — U.S. wheat futures dipped to two-month lows on Wednesday as improving weather for developing crops in the drought-hit southern Plains put the focus back on ample world supplies, traders said.
Corn and soybean futures closed lower after a choppy session as traders squared positions a day ahead of key U.S. planting intentions and quarterly stocks reports due from the U.S. Department of Agriculture.
Chicago Board of Trade May wheat settled down 3-1/2 cents at $4.45-1/2 per bushel after hitting $4.44-1/2, its lowest since Jan. 25 (all figures US$).
CBOT May corn ended down 1/2 cent at $3.73-1/2 a bushel while May soybeans fell 1-1/2 cents at $10.18 a bushel.
Wheat futures sagged after rains crossed portions of the southern Plains hard red winter wheat belt this week, bolstering yield prospects for a crop that has struggled with dry conditions, in some areas since October.
“Rainfall over the past two days was similar to expectations across much of the southern and eastern Plains, leading to improvements in west central and north central Texas and eastern Oklahoma,” forecaster Radiant Solutions said in a daily note to clients.
“However, rainfall underperformed a bit in western Oklahoma and northwestern Texas, where amounts were generally less than 0.1 inch,” the note said.
USDA on Monday rated 13 per cent of winter wheat in Kansas, the top producer, in good-to-excellent condition, up from 11 per cent a week earlier, although still well down from a year ago.
Trade in grains was subdued as brokers awaited direction from Thursday’s USDA plantings and stocks reports. Analysts expected the government to project an increase in U.S. soybean plantings compared to 2017 and a decline in corn acreage.
Analysts also expected the USDA to show the largest U.S. March 1 stocks on record for both corn and soybeans, following several years of bumper harvests.
“The stocks data tomorrow should be more of a factor … as they are concrete numbers,” MaxYield Cooperative analyst Karl Setzer said in a note to clients. On acreage, Setzer noted USDA will revise Thursday’s planting intentions forecasts with its June 29 acreage report.
“Updated numbers in June will have much more of an impact on trade,” he said.
Rising estimates of the soybean harvest in Brazil, the world’s biggest exporter of the oilseed, hung over soybean futures, capping rallies. Agroconsult, a Brazilian consulting firm, on Tuesday raised its estimate of the country’s soy crop to 118.9 million tonnes, from 117.5 million previously.
Nonetheless, Chinese importers are paying record harvest-time premiums for Brazilian soybeans, fearing disruption to shipments from the U.S.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.