SINGAPORE: Chicago wheat edged lower on Tuesday, with ample supplies from the Black Sea region adding pressure on prices, although concerns over dryness across US winter crop areas curbed losses.
Soybeans slid on concerns over demand from top importer China, which is facing rising number of COVID-19 cases.
“US hard red winter wheat areas will continue dry biased and warming this week will attempt to stimulate new plant development in the southern Plains,” said Terry Reilly, senior analyst with Futures International.
The most-active wheat contract on the Chicago Board of Trade (CBOT) slid 0.2% to $8.16-1/2 a bushel, as of 0429 GMT. Soybeans lost 0.1% to $14.36 a bushel and corn gained 0.1% at $6.64 a bushel.
The US Department of Agriculture (USDA) on Monday rated 32% of the US winter wheat crop in good to excellent condition, unchanged from the previous week, while analysts on average had expected a 1-point improvement.
The wheat ratings are the lowest for this time of the year in USDA records dating to 1986. A year ago, 44% of the winter wheat crop was rated good to excellent.
The newly planted crop has struggled with dry conditions as 75% of the US winter wheat production area is experiencing drought, according to the government.
EU wheat mixed with exports in focus
Russian wheat prices fell last week amid an extension of the Black Sea deal allowing Ukrainian grain shipments, analysts said on Monday.
Prices for Russian wheat with 12.5% protein content and for supply from Black Sea ports in December were at $314 a tonne free on board (FOB) on Friday evening, down $3.5 from a week earlier, the IKAR agriculture consultancy said in a note.
Tightened COVID-19 rules in China fuelled worries over the global economic outlook and demand for commodities. Beijing warned it was facing its most severe test of the coronavirus pandemic.
Traders also worried about a potential year-end US rail strike, after workers at the largest rail union voted against a tentative contract deal reached in September.
Winter crops in most of Europe were off to a good start, helped by historically warm weather and sufficient moisture, but a lack of rain is prompting concern in the southern region, the European Union’s crop monitor MARS said on Monday.
Commodity funds were net buyers of CBOT soybean, soymeal and soyoil futures contracts on Monday and net sellers of corn and wheat futures, traders said.
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