SINGAPORE: Chicago soybean and corn prices dropped on Tuesday after US government data showed that a decline in crop conditions due to hot and dry weather was not as severe as many analysts had expected.
Wheat inched higher, although sluggish demand for US supplies and competition from cheap Russian grain limited the upside in prices. “The market is watching US weather for soybeans in the coming weeks,” said one Singapore-based agricultural commodities analyst. “Too much heat and dryness will reduce yields.”
The most active soybean contract on the Chicago Board of Trade (CBOT) was down 0.4% at $14.00-3/4 a bushel, as of 0310 GMT. Corn fell 0.6% to $4.93-1/2 a bushel and wheat added 0.1% to $6.17-1/2 a bushel.
The US Department of Agriculture (USDA) in a weekly crop progress report on Monday rated 58% of the soybean crop as good to excellent, down a percentage point from 59% last week.
Thirteen analysts surveyed by Reuters had on average expected a 3 percentage point decline. For corn, the USDA rated 56% of the crop as good to excellent, down 2 percentage points from 58% a week ago.
Analysts had expected a 3-point decline.
The relatively modest drop in ratings eased fears about supply.
The US is the world’s No. 2 exporter of corn and soybeans after Brazil.
However, soybeans are still up nearly 9% from a low earlier this month after sweltering heat in the US Midwest stressed the crop.
Temperatures have cooled but below-normal rainfall is forecast over the next two weeks. Soybeans are in their critical pod-setting phase and rely on August moisture to maximize yields. Corn and wheat prices have barely rallied, with the markets better supplied.
The USDA confirmed private sales of 123,000 metric tons of US new-crop corn to Mexico and 296,000 tons of new-crop soybeans to undisclosed buyers, signalling strong demand. Commodity funds were net buyers of CBOT soybean, corn, soymeal and soyoil futures and net sellers of wheat futures on Monday, traders said.
For spring wheat, the USDA rated 37% of the crop as good to excellent, down 1 percentage point and matching the average analyst estimate. Also in wheat markets, agricultural consultancy Sovecon raised its forecast for this year’s Russian harvest to 92.1 million tonnes from 87.1 million tons.
Russia is estimated to export 5.1 million tons of wheat in August, up from 3.5 million tons a year earlier, Sovecon said. On supplies from Ukraine, however, the Kremlin said the passage of a second ship along a temporary Black Sea corridor had nothing to do with the prospects for reviving a grain deal involving Russia.
Ukrainian farmers plan to increase the sown area of winter rape for 2024 and may cut the sown area of winter wheat, an agriculture ministry survey showed.
Germany’s grain harvest, meanwhile, will fall 2.9% year-on-year to some 42.23 million tons after suffering from unfavourable weather swinging from drought to rain just before harvest, the agriculture ministry said.
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