Chicago | Reuters — U.S. wheat futures dropped to their lowest level in more than six weeks on Tuesday, their second straight day of declines, as weather forecasts bolstered expectations for strong yields adding to already-abundant supplies in the coming weeks, traders said.
Corn futures also fell, hitting their lowest since Feb. 1, on pressure from the drop in wheat and improving crop prospects in Brazil.
Soybeans eked out a higher close on some late bargain-buying, but rally attempts were stifled by expectations of huge harvests in South America.
MGEX spring wheat futures notched the biggest losses, shedding 1.8 per cent, as the forecast for the northern U.S. Plains promised a boost to soil moisture ahead of planting season.
Rains also were expected further south, which will benefit the crops there that recently emerged from dormancy.
“This week’s focus is on good rains expected to build across much of the winter wheat belt over the next 10 days,” Arlan Suderman, chief commodities economist at INTL FCStone, said in a note to clients. “The southwestern quarter of the Plains hard red winter wheat belt looks to miss out on meaningful moisture at this point, but that matters less when old-crop stocks are so large.”
Chicago Board of Trade May soft red winter wheat settled down 3-3/4 cents at $4.26-1/2 (all figures US$). Prices for the most-active contract bottomed out at $4.23, their lowest since Feb. 7.
“The wheat market collapsed last night and today it remains in a bearish tone,” said Kaname Gokon at brokerage Okato Shoji in Tokyo. “The weather for U.S. winter crop is expected to improve, (and) there is more downside for wheat prices.”
CBOT May corn was down 2-1/4 cents at $3.61-1/4 a bushel.
Rain was expected in Brazilian corn growing areas in the coming two weeks, which could favour the development of crops for the country’s second annual corn harvest, Commodity Weather Group said.
Crop analysts also continued to raise estimates of Brazil’s ongoing soybean harvest to new records. A record harvest also was expected in Paraguay, the world’s fourth-biggest soybean exporter.
CBOT May soybeans were up two cents at $10.01-1/2 a bushel.
Soybean futures had fallen for 10 of the previous 11 sessions.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.