Chicago | Reuters – U.S. soybean futures firmed on Tuesday after a weekly government survey lowered condition ratings for the U.S. crop by more than expected, raising concern about a smaller harvest this autumn.
Wheat retreated after closing at a three-year high on Monday, weighed down by slow demand for U.S. exports despite expected crop shortfalls in several major exporting countries.
Corn eased along with wheat, although losses were limited by good demand and tightening global supplies.
Grain traders are taking positions ahead of Friday’s monthly U.S. Department of Agriculture supply and demand reports, the first of the season to include field surveys for U.S. crops.
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Weeks of hot, dry weather in parts of the U.S. Midwest are believed to be eroding yield potential for corn and soybeans, although scattered showers are expected across the region this week.
The USDA said on Monday that 67 percent of the soybean crop is in good to excellent condition, below market expectations of 69 percent. Corn was rated 71 percent good to excellent, in line with forecasts.
“The market has some questions about soybean yields given the crop conditions. We’ll have to wait to see what USDA says on Friday,” said Rich Nelson, chief strategist with Allendale Inc.
Chicago Board of Trade November soybeans , the most actively traded contract that represents the next harvest, were up 12-1/4 cents, or 1.4 percent, at $9.05-3/4 a bushel. New-crop CBOT December fell 3/4 cent to $3.84-1/2 a bushel.
Trade tensions between the United States and China hang over the soybean market as the world’s top soy importer has not booked major U.S. shipments in weeks.
Oilseeds analysts Oil World projected China would resume imports of U.S. soy in the fourth quarter despite the trade dispute.
Wheat markets reversed course after overnight gains as demand for U.S. export shipments has been slow to develop despite shrinking crops in major export regions including Europe, the Black Sea region, Australia and Canada.
“The ongoing hot and dry conditions are prompting repeated downward revisions of crop estimates,” Commerzbank said.
“Wheat export prices in Russia meanwhile are rising significantly due to crop shortfalls and quality problems.” France’s farm ministry on Tuesday reduced its estimate of this year’s French soft wheat harvest, underlining the impact of high temperatures in Europe.
CBOT September soft red winter wheat shed 6-1/4 cents to $5.68-1/4 a bushel, while September hard red winter wheat dropped 6-1/2 cents to $5.79-1/2 a bushel.
– Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.
