CBOT wheat rallies on weather; corn, soy dip before USDA planting report

CHICAGO: US wheat futures rallied on Monday on concerns about harvest risks as more heavy rain was forecast in some US grain belts and warm, dry weather was expected in top wheat exporter Russia.

Meanwhile, corn and soybean futures traded choppily as the markets digested a threat of US tariffs against Mexico, ending the day on a negative note.

US President Donald Trump last week threatened to place tariffs on imports of goods from Mexico in response to illegal immigration. The move raised fears about agricultural trade with Mexico, the largest buyer of US corn, and wider effects on economic growth amid an ongoing trade dispute between Washington and Beijing.

"It's all weather and trade today," said Jim Gerlach, president of A/C Trading. "Eventually, this market is going to shift from focusing on acres to the condition to the corn and soybean crops, but it's going to be a while before we get there."

Torrential rain, which has already brought corn planting to its slowest pace on record, is adding to concerns about damage to US wheat.

The latest forecasts showed more heavy rain in part of the central US Plains in the next two weeks, including in the major wheat-growing state of Kansas, said Joel Widenor, meteorologist for Commodity Weather Group (CWG).

But it was the addition of the dry forecast for the Black Sea winter wheat region that provided the boost to wheat futures prices on Monday, traders said.

"The Russian crop is well into maturity, so there's now concerns about yield loss," said commodities broker Craig Turner of Daniels Trading. "They're not going to lose the crop, but it's not going to be as big as we all previously thought."

The most-active wheat contract on the Chicago Board Of Trade settled the day up 3.43% at $5.19-3/4 a bushel. Kansas hard red winter wheat, which led overnight gains in US futures, saw its spot prices settle up 3.01% at $4.86-3/4.

Corn and soybean traders on Monday also tried to hedge their risks before a weekly US government crop planting report, that was expected to shed more light on whether historic rain delays in seeding corn and soybean crops continued last week.

Grain traders were looking ahead to the US Department of Agriculture's (USDA) weekly crop progress report, issued after the market close on Monday, to see if soggy field conditions continued to blight corn and soybean planting efforts in the Midwest.

Corn and soybean futures traded in a narrow range earlier in the day. But prices fell sharply after Reuters published an analyst poll that predicted USDA's report should show that farmers were able to plant 71% of the US corn crop as of Sunday, according to the average estimate in a survey of 15 analysts on Monday.

Trade estimates for the week ended June 2 ranged from 68% to 76%. The government was scheduled to publish its report at 3 p.m. CDT.

Analysts also expected the USDA on Monday to report that soybean planting was 42% complete, with estimates ranging from 39% to 45%. Analysts put the five-year average for soybean planting progress at 79%.

CBOT corn settled the day down nearly 1% at $4.24-1/4 a bushel, while soybeans inched down 0.09% to $8.79 a bushel.