Chicago | Reuters — U.S. wheat futures plunged more than four per cent on Tuesday as pressure from a strong dollar and technical selling outweighed concerns about crop damage due to heavy rain in the southern U.S. Plains.
Corn prices slid about 1.5 per cent on spillover weakness from tumbling wheat and generally favourable crop development weather around the U.S. Midwest, while concerns about rain-delayed planting limited losses in soybeans.
Wheat traders are awaiting reports on the extend of crop damage following torrential rains in Texas and Oklahoma over the U.S. Memorial Day weekend. Analysts expect the U.S. Department of Agriculture to confirm a slight decline in U.S. winter wheat ratings in a weekly report due later on Tuesday.
“The trade has recognized the lower supply due to the weather. But they also realize the lower demand that the stronger dollar is creating,” said Mike Zuzolo, president of Global Commodity Analytics.
More precipitation was expected from Wednesday to Saturday before easing in the most-affected southern Plains belt for the rest of the two-week outlook period, the Commodity Weather Group said in a note.
The dollar hit one-month highs against a basket of currencies on Tuesday, reflecting a fall in the euro below $1.09 (all figures US$).
A stronger dollar dims the appeal of U.S. grain supplies already struggling to compete in global markets with cheaper offerings from South America, Europe and the Black Sea region.
Chicago Board of Trade July soft red winter wheat futures fell 21-3/4 cents, or 4.4 per cent, to a 1-1/2 week low of $4.93-1/2 a bushel. July hard red winter wheat dropped 22 cents, or 4.2 per cent, to $5.24-1/2 a bushel.
Selling in both commodities accelerated as prices fell below their 50-day moving averages.
CBOT July corn shed five cents of 1.5 per cent, to $3.55 a bushel, the contract’s lowest level since early October. CBOT July soybeans ended 1-3/4 cents lower at $9.22-1/2 a bushel, a contract low.
Analysts on average expect USDA to report the U.S. corn crop at 93 per cent planted as of last Sunday, above the five-year average of 88 per cent, while soybean seeding is expected to be six points above average at 61 per cent complete.
Wet conditions and forecasts for more rain across the Midwest this week could delay the completion of soybean planting, which lent some support to prices.
— Karl Plume reports on agriculture and ag markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.