U.S. grains: Corn, wheat, soy step back after reaching new eight-year highs

Wheat at highest since February 2013 after U.S. crop rating fall

CBOT July 2021 wheat with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — Chicago corn, wheat and soybean futures ended Tuesday lower after extending a rally to eight-year highs, supported by corn supply worries as adverse weather cast early doubts over harvest prospects in top exporters Brazil and the United States.

A sharp decline in weekly U.S. wheat crop ratings also kept the focus on weather risks for Northern Hemisphere wheat.

The most-active corn contract on the Chicago Board of Trade (CBOT) ended three cents lower at $6.54-1/2 per bushel after reaching $6.84, its highest since March 2013 (all figures US$).

Soybeans slid 19-3/4 cents to $15.19-1/2 per bushel, after hitting their highest since October 2012 at $15.74-3/4. CBOT wheat lost 6-3/4 cents to $7.32-3/4 per bushel, after earlier reaching its highest since February 2013 at $7.69-1/2.

Trade was mixed throughout the day, with end-of-day easing possibly caused by farmer selling or speculative traders squaring positions as the month end nears, said Arlan Suderman, chief commodities economist at StoneX.

“I think we’re going to see continued volatility,” he said. “It wouldn’t surprise me if we see a period of consolidation.”

Brazil’s upcoming second corn crop is seen as crucial to replenishing tight global stocks, though weather forecasts show little rain for dry southern regions in the week ahead.

U.S. plantings have been delayed by cold temperatures, though pace is expected to pick up in the coming weeks.

Meanwhile, elevated futures prices may translate to more farmers selling old-crop supplies.

“I think we’re trying to get to a level where we entice the grain in the farmers hands or the elevator to move into the pipeline,” said Don Roose, president of U.S. Commodities.

Wheat also drew support from weather. USDA estimated 49 per cent of U.S. winter wheat was in good or excellent condition, in a four-point drop from a week earlier that was sharper than expected on average by analysts.

— Reporting for Reuters by Christopher Walljasper in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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