Wheat pares gains after hitting highest in a week on US crop report

CANBERRA: US wheat futures pared some gains on Tuesday after being lifted to a one-week high in Asian trade by a US Department of Agriculture (USDA) report that pegged the condition of crops below market forecasts, stoking concerns about global supplies.

Corn and soybeans dipped, with rain over the weekend seen beneficial to crops.

The most active wheat futures on the Chicago Board Of Trade were up 0.5% at $6.68-1/2 a bushel by 1100 GMT, down from a session high of $6.76-1/2 a bushel - the highest since June 14. Wheat closed up 0.3% on Monday.

Analysts said wheat was drawing support from the USDA crop condition report.

"The survey recorded another drop in the condition of the US spring wheat crop," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. "The production outlook for high-protein wheat continues to dim."

The USDA said just 27% of the crop was in good-to-excellent shape, a 10-point drop that was well below expectations.

However, even if crop ratings declined sharply last week, rains last weekend were likely to aid supplies, the USDA said.

"In some cases, that moisture stopped what would have been a certain drop in conditions," Thomson Reuters analyst Karen Braun said.

The most active soybean futures were down 1% at $13-05-3/4 a bushel, having firmed 0.5% on Monday.

Soybeans were rated 60% good to excellent, in line with analyst expectations, but down 2 points from a week earlier. The USDA said the US soybean crop was 97% planted, on par with trade expectations.

The most active corn futures were down 1% at $5.51-1/2 a bushel, having closed down 0.6% in the previous session.

The US corn crop was rated to be 65% in good-to-excellent shape as of Sunday, down 3 percentage points from a week earlier and a point lower than the average estimate in a Reuters survey of 11 analysts ahead of the report.