Prices off highs as USDA sees crops in decent condition

HAMBURG: Chicago corn and soybean prices fell on Tuesday, pulling back from gains on Monday, after the US Department of Agriculture (USDA) assessed US crops to be in an overall decent condition.

Soybeans touched a four-month high on Monday and corn approached last week's 3-1/2 month peak on buying demand from China along with fears that hot, dry weather could threaten US crops as corn enters an important development stage.

Chicago Board of Trade most active corn fell 1.3% to $3.51-1/4 a bushel at 1039 GMT. Soybeans dropped 0.5% to $9.01-1/2 a bushel, wheat was unchanged at $4.93-1/4.

After Monday's market close, the USDA's weekly US crop conditions report said 71% of the US soybean crop was in good-to-excellent condition, unchanged from the previous week but just above analysts' expectations of 70%.

The USDA said 71% of US corn was in good-to-excellent condition, down from 73% last week and 72% expected by analysts.

"The USDA's crop conditions report said US corn and soybeans are looking reasonable with no reason today for extra concern about crops, so prices are weaker," said Matt Ammermann, StoneX commodity risk manager. "Both US corn and soybeans are holding over 70% good-to-excellent condition, so overall crops are looking reasonable."

"But the concern about the US weather remains in the market and the mood could change quickly if there are new forecasts for hot, dry weather in US corn regions in the coming days."

Some 56% of US winter wheat was harvested, up from 41% last week.

"The US wheat harvest is seeing fine progress with no cause for worry today," Ammermann said. "Crop weather in the Black Sea region is also looking generally good for wheat quality."

Traders were also awaiting the outcome of a new wheat purchase tender from Egypt to assess Black Sea prices.