Wheat eases on stable crop conditions after prices rose last week

CHICAGO: US winter wheat futures fell about 1 percent on Tuesday as crop conditions stabilized in the dry Plains growing region and buying interest waned following a surge that brought prices to an eight-week high last week, traders said.

Chicago Board of Trade May wheat futures eased 5-3/4 cents to $5.03-3/4 per bushel and K.C. May wheat declined 6-1/2 cents to $5.39 as of 11:47 a.m. CST (1747 GMT).

Each was hovering near the roughly eight-month highs reached last week amid drought conditions in parts of the Plains.

The U.S. Department of Agriculture on Monday boosted wheat crop ratings in the top state of Kansas but conditions still were only 13 percent good to excellent, up 1 percentage point from a week ago.

USDA on Thursday will release monthly supply and demand outlooks for wheat, corn and soybeans. Some analysts expected the agency to show larger U.S. wheat ending stocks due to weak export demand and despite the risk of crop losses.

There was little rain relief in weather outlooks for the Plains or in Argentina, where drought has stressed crops in the South American country that is the No. 3 global soy and corn exporter.

"The balance sheets don't justify the big move up (in wheat prices). But we're not trading the balance sheet; we're trading production losses," said Adam Knosalla, broker at Frontier Futures in Minnesota.

Egypt earlier on Tuesday bought 175,000 tonnes of wheat from Russia - fresh confirmation that wheat from Europe and the United States were largely uncompetitive for shipments to one of the world's biggest markets.

CBOT May corn was up 1/4 cent at $3.87-1/2 per bushel and CBOT soybeans down 1-1/2 cent to $10.76, moving on position squaring ahead of the USDA monthly reports.

"Markets are taking a pause today following the recent sharp rises although the background concern about dryness in the U.S. Plains grain belts and Argentina has not changed," said Matt Ammermann, commodity risk manager with INTL FCStone.

"There had been a considerable amount of short-covering last week as prices rose but that money flow does not seem to be supporting wheat and soybeans today."