SINGAPORE: Chicago wheat slid for a third straight day on Wednesday as the market was pressured by forecasts of rains in parched US Plains, while corn lost around half a percent after its longest rally in eight months.
Soybeans edged lower amid a broad-based weakness in the commodity markets although losses were limited by concerns over harsh US Midwest weather which has hurt the crop.
"Wheat is down due to forecast of wet weather which will be helpful for the US crop and also we are looking at higher output from Australia while the demand is slow," said Lynette Tan, an analyst with Phillip Futures in Singapore.
"For corn we are getting some profit-taking at the moment but there are bullish fundamentals of dry weather and lower crop ratings from the USDA."
Chicago Board of Trade benchmark December wheat fell 0.6 percent to $7.86-1/4 a bushel by 0254 GMT. November soy lost 0.07 percent to $14.56 a bushel, while December corn slid 0.5 percent to $7.71-3/4 a bushel.
Hot weather in July and a lack of rainfall in several key soybean growing areas in August has led to a weekly drop in crop condition ratings and related drops in forecasts for US crop production this year, especially for corn.
The US Department of Agriculture (USDA) on Monday said 54 percent of the US corn crop was in good to excellent condition, down from 57 percent a week ago and 70 percent a year ago. Fifty-seven percent of the soybean crop was in good to excellent condition, down from 59 percent a week ago and 64 percent a year ago.
USDA said 9 percent of the corn crop was mature, 53 percent was dented and 88 percent was doughing. Two percent of the soybean crop was dropping leaves while 93 percent was setting pods.
Still, rain is expected by the weekend in most of the US Midwest and there is some relief expected next week from the summer's relentless heat in the Plains, an agricultural meteorologist said on Tuesday.
The rainfall and cooler weather will benefit some late filling corn and late pod-setting soybeans, but most crops are nearing mature status which will diminish the benefits.
Extreme heat and a lack of rainfall in the Plains has devastated crops and grazing land, forcing young cattle from pastures onto feedlots at a rapid pace.
Commodity funds were net buyers of an estimated 9,000 contracts of Chicago Board of Trade corn futures on Tuesday, trade sources said. They were net sellers of 3,000 wheat contracts and buyers of 8,000 soybean contracts.
The soybean market has been supported by dry weather in China and expectations of higher demand from the world's top importer.
Copyright Reuters, 2011
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