Wheat down on better US weather, positioning ahead of USDA

CHICAGO: US wheat futures declined on Tuesday as rains in the Southern Plains breadbasket boosted prospects for the region's drought-hit winter wheat crop, analysts said.

Soybean futures fell while corn closed flat in light volume ahead of key data due this week from the US Department of Agriculture (USDA). The government was scheduled to release its US planting intentions and quarterly grain stocks reports on Thursday.

Chicago Board of Trade May wheat settled down 5-1/4 cents at $4.49 per bushel. May soybeans ended down 6 cents at $10.19-1/2 a bushel while May corn finished unchanged at $3.74 a bushel after a choppy session.

Wheat futures fell the most on a percentage basis on improving weather in the Southern Plains, where winter wheat has resumed growth after its winter dormancy, a time when the crop tends to require increased moisture.

The USDA on Monday rated 13 percent of winter wheat in Kansas, the top producer, in good-to-excellent condition, up from 11 percent last week. However, ratings are down significantly from a year ago, when 38 percent of the state's wheat was rated good to excellent.

Showers crossing the Plains on Tuesday should help recharge soil moisture in some areas.

"The rains are too late for some wheat fields, but other wheat still has the opportunity to recover a significant amount of previously lost yield," INTL FCStone chief commodities analyst Arlan Suderman wrote in a note to clients.

CBOT soybeans declined as traders adjusted positions ahead of Thursday's USDA reports. Funds hold a net long position in soybeans and corn, leaving those markets vulnerable to long liquidation.

Analysts expect the government to project US soybean plantings for 2018 at a record-high 91.1 million acres and corn plantings at 89.4 million acres, down from 90.2 million in 2017.

Analysts also expect the USDA to report record-high March 1 corn and soybean stocks, reflecting several years of bumper harvests.

Additional pressure stemmed from news that Agroconsult, a Brazilian consulting firm, raised its estimate of the country's soybean harvest to 118.9 million tonnes, from 117.5 million previously.

Soy and corn futures drew early support from reports that the United States and China, the world's top soybean buyer, were negotiating to avert a trade war.