Corn, soy firm as crop conditions in focus; wheat falls

PARIS/SINGAPORE: Chicago corn and soybeans edged higher on Tuesday as lower-than-expected US crop ratings underscored mixed growing conditions, while the market awaited results from a Midwest field tour.

Gains were capped by signs of slower demand in some markets as consumers adjust to elevated prices and falling inventories.

US and European wheat dropped as investors booked profits after 8-1/2 year highs last week linked to declining northern hemisphere harvest prospects.

The most-active corn contract on the Chicago Board of Trade was up a quarter of a cent at $5.69 a bushel by 1035 GMT, while CBOT soybeans were up 0.3% at $13.72 a bushel.

In a weekly report after Monday's market close, the US Department of Agriculture (USDA) rated 62% of US corn crop good to excellent, down 2 points from a week earlier, and soybeans 57% good to excellent, down 3 points. Traders on average had expected no change.

Soybeans up 5-20 cents, wheat up 1-3 cents, corn down 3-4 cents

The lower ratings tempered hopes for a boost to crops from rainfall forecast in the coming days.

"The market is considering downside but not any upside to yields," said Michael Magdovitz, commodity analyst with Rabobank. "The rains have come too little, too late."

Initial results from this week's Pro Farmer Midwest Crop Tour projected lower corn yields and soybean pod counts than last year in South Dakota but higher levels in Ohio, supporting expectations of contrasting yields between western and eastern growing belts.

Soybeans have also been supported by a run of sales to China.

However, monthly US soybean crushing in July, according to National Oilseed Processors Association (NOPA) data released on Monday, was below trade estimates.

"Consumers are having to make pricing decisions at 50%-60% higher than last year. We're starting to see some demand rationing," Magdovitz said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 1.4% at $7.49-3/4 a bushel as it pulled away from Friday's 8-1/2 year peak of $7.74-3/4.

Wheat markets had surged after the USDA made steep cuts to world supply projections in a monthly outlook on Thursday, before edging down on Monday.

"The consolidation process is there and we're waiting to see what the next level is," Magdovitz said of wheat prices.

Russia's declining output and higher prices have caught short international trading companies that sold wheat to Asian millers, traders told Reuters.