HAMBURG: Chicago corn futures fell on Tuesday after a weekly US Department of Agriculture (USDA) report said the US crop was in better condition than market forecasts.
"The positive picture of US crop conditions given by the USDA on Monday along with positive US weather is weakening corn and soybeans today," said Matt Ammermann, commodity risk manager with INTL FCStone. "Wheat is being pressured by the good harvest picture in the northern hemisphere."
Chicago Board of Trade most-active corn contract was down 0.7% at $4.24 a bushel at 1108 GMT. Wheat fell 0.4% to $501-1/2 a bushel, hovering around the psychologically-important $5 level. Soybeans fell 0.1% to $9.02-1/2 a bushel.
The USDA weekly crop progress report on Monday said 58% of US corn was in good to excellent condition, up from 57% last week. Analysts had on average expected 57%.
The USDA's rating for US soybeans was unchanged on the week at 54% good to excellent. Analysts had also estimated 54%.
"The USDA's reported that corn crop condition improved, which few in the market expected, while soybean condition was unchanged," Ammermann said. "This was against the background of overall good weather in the US Midwest over the weekend with decent rain which will help crops."
"This is helping to keep the market weak ahead of the USDA's next world supply and demand estimates on Aug. 12."
Phin Ziebell of the National Australia Bank added: "The corn crop is looking better than what had been feared. Especially, given the challenging rains and then heat."
Traders are also watching the new round of US-China talks this week to settle the trade war which has slashed US soybean exports to China. But dealers were wary there could be a breakthrough.
"US is downplaying expectations while no comments yet from the Chinese officials," brokerage Allendale said in a note.
The USDA said that 75% of US winter wheat was harvested, up from 69% last week while analysts expected 81%.
"The USDA said the US wheat harvest is a little slower than expected but progress is satisfactory and the market is not worried," Ammermann said.
"The northern hemisphere is making good progress with its wheat harvest and with perhaps half now finished the current outlook is for plentiful wheat supplies."
"The US will face heavy competition in export markets in a period of sluggish demand. Against the stronger dollar, markets fall when there is concern about US export competitiveness."
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