U.S. grains: Corn trims gains on technical selling

Chicago | Reuters — Chicago corn futures ended slightly lower on Tuesday after a day of positive trading after the U.S. Department of Agriculture (USDA) reported decreased crop conditions due to recent hot weather across the western corn belt.

Wheat slid as winter harvests continue, while soybeans remained lower as weak soymeal trade overwhelmed gains in soyoil.

Chicago Board of Trade most-active corn fell 1/4 cent to $3.29 a bushel after hitting $3.34-1/2, it’s highest since June 8 (all figures US$).

Wheat fell 8-3/4 cents to $4.96 a bushel, the biggest single-day drop since May 13. Soybeans fell two cents to $8.67 a bushel.

USDA rated 71 per cent of the U.S. corn crop in good-to-excellent condition in its weekly report after the market closed on Monday, dropping from last week and below average analysts’ expectations of 75 per cent.

“The initial catalyst was the downgrade in conditions, even though we think the current weather pattern of hot and dry out west is going to break by week’s end,” said Tom Fritz, commodity broker at EFG Group. He noted that funds’ heavily shorting corn continues to support the market.

USDA said 72 per cent of U.S. soybeans were in good/excellent condition, the same as last week and meeting analyst expectations. It said 15 per cent of U.S. winter wheat was harvested, against seven per cent last week and 17 per cent expected by analysts.

“The soybean market spins its wheels. Strength in bean oil keeps it alive, whereas the meal market is unable to do anything on the upside,” said Fritz.

Wheat futures continue to drag on global stocks as winter wheat harvest marches on in the U.S. Great Plains and abroad, while funds continue to add to short positions.

“My guess is, the short is stepping in and resetting in wheat,” said Joe Davis, director of commodity sales at Futures International. “It was up a couple cents overnight, but especially with the open, it just broke.”

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Michael Hogan and Naveen Thukral.