HAMBURG: US wheat futures rose on Tuesday after the US Department of Agriculture (USDA) assessed the condition of the US winter crop was well below the previous year after recent dry weather in US grain belts.
Soybeans and corn rebounded on continued support from unexpected USDA forecasts last week of smaller US sown areas.
But fears of a US trade war with China, a top buyer of agricultural products, kept investors on edge after Beijing announced higher tariffs on a long list of US goods, including pork and ethanol.
Chicago Board of Trade most-active May wheat was up 0.8 percent at $4.49-3/4 a bushel at 1002 GMT, having closed down 0.9 percent on Monday.
May soybeans rose 0.6 percent to $10.41-3/4 a bushel. Soybeans ended down 0.7 percent on Monday after hitting a three-week high of $10.60-1/2. May corn was hardly changed, down 0.06 percent at $3.87 a bushel.
The USDA late on Monday assessed only 32 percent of the US winter wheat crop in good to excellent condition, down from 51 percent this time last year.
"Wheat is being supported today by the USDA crop report late on Monday with the condition of US winter wheat assessed much lower than last year following the recent dry weather," said Matt Ammermann, commodity risk manager with INTL FCStone.
"The USDA's winter wheat crop rating of 32 percent good to excellent was the lowest at this time I calculate since 2002. It is a bad national number and confirms the poor individual state numbers we have received in past weeks."
"The dry weather is having a negative impact on US wheat and forecasts do not indicate a major improvement in the immediate future."
US corn futures jumped nearly 4 percent on Thursday and soybeans rose more than 2 percent after the USDA surprised markets by forecasting reduced US soybean plantings and a larger-than-expected drop in corn sowings.
"Soybeans and corn are again supported by the USDA's planting estimate on Thursday, so fundamentally are still looking strong," Ammermann said.
"But there is also the concern about the trade dispute with China damaging US exports which is limiting gains. Soybeans and corn were not in China's list of products for trade retaliation but concern about the dispute damaging US exports remains in the market today."
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