US wheat futures dip to 6-1/2 months low

US wheat futures dropped to a 6-1/2 months low on Monday, posting declines for the sixth straight session on advancing harvest of the US winter wheat crop and better crop weather in Europe. Improved growing weather in the United States also led to better crop condition ratings from the US Department of Agriculture (USDA), which may add pressure to each market in the Globex trade on Tuesday.
USDA, in its weekly crop progress report released late on Monday, said 70 percent of the US corn crop was in good to excellent shape, up from 69 percent a week ago. Conditions also improved one percentage point for soyabeans and for wheat. "Seasonally, without some kind of big stresser, ratings tend to improve a bit (at this time of year)," said Marty Foreman, analyst with Doane Advisory Services.
Corn and soyabeans bucked the downtrend inching higher on bargain buying after falling to one-month lows late last week and on inter-market spreading as traders bought corn and soya while selling wheat. "They've pretty much been given the all clear to sell wheat with the harvest progress in the US Plains and the European market was down on better weather there," said Mike Zuzolo, analyst for Global Commodity Analytics.
Wheat prices in Europe dipped to the lowest level in more than six weeks on improved crop weather and reduced risk appetite in commodity markets as concern about Greece's debt problems deepened. US wheat futures, which fell over 10 percent last week, were now down about 25 percent from the $9 a bushel spot contract high for 2011, set in early February.
"Weather looks good and crops are improving," said Dan Dempsey, an analyst for Iowa Grain. CBOT July wheat was down 13 cents per bushel at $6.59-1/4 per bushel. July corn rose 1/4 cent to $7.00-1/2 and July soya gained 2-3/4 cents to $13.35-3/4 a bushel.
High protein milling wheat traded on the Minneapolis Grain Exchange ended higher on worries that wet weather will keep farmers from finishing spring wheat seedings. "I have customers in the northern US Plains and many of them are talking about giving up on finishing plantings," said Jim Bower of Bower Trading.
MGEX July closed 3-1/4 cents per bushel higher at $9.00-1/2 per bushel. Corn found some underpinning when crude oil moved higher another reminder of the close correlation between corn-based ethanol in the US and crude oil. And traders said corn was oversold after falling 11 percent last week, its biggest weekly drop in a year and a half, driven by fund long liquidation and profit taking. Analysts and traders said the yellow grain was due for a technical bounce.