HAMBURG: Chicago wheat fell on Wednesday, coming under selling pressure after rallying to two-month highs on Tuesday, although losses were limited by concern about results of a crop tour of the US Plains where dryness threatens yields.
Corn dipped after rising on Tuesday to 8-1/2 month highs due to planting delays in the United States and adverse weather in Brazil.
"Wheat, corn and soybeans are being weakened today by profit taking after their strong rises on Tuesday," said Matt Ammermann, commodity risk manager with INTL FCStone. "It is quite common to see markets falling on selling pressure after days with large rises and yesterday's jump was huge. The overall picture remains bullish."
Chicago Board of Trade July wheat contract fell 0.9 percent to $5.24-1/4 a bushel at 1037 GMT. July rose around 3 percent on Tuesday to hit its highest since March 2.
July corn fell 0.2 percent to $4.04-3/4 a bushel. July soybeans fell 0.5 percent to $10.47-3/4 a bushel, having risen on Tuesday as soymeal hit contract highs.
Attention focused on the Wheat Quality Council's annual Kansas crop tour, which began scouting fields on Tuesday, with initial results coming in poor after dry spring weather.
Yield prospects for hard red winter wheat in north Kansas were estimated at 38.2 bushels per acre (bpa), crop scouts on the first day of the tour said. That is down from the tour's 2017 average yield of 43 bpa and the five-year average of about 42 bpa.
"The market rises when an event is feared but when the event takes place there can be a price fall as the event was perhaps not as bad as feared," Ammermann said. "However, first results of the crop tour are not positive. There is also concern about dryness in Black Sea and Australia, so there is lots of dryness talk."
Some 17 percent of the US corn crop had been planted by Sunday, behind the five-year average of 27 percent.
"Corn remains supported by fears about unfavourable weather for the Brazilian crop and slow US plantings despite weakness today," Ammermann said. For US plantings, there is a lot of focus on the date May 15 as an important deadline for US corn to be sown, corn sown after May 15 could have lower yields."
"Soybeans are also underpinned by drought reducing Argentina's soybean crop and so Argentine soymeal exports, with expectation more demand could be transferred to the US, with crush margins remaining near prior highs."
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