Wheat nears two-month lows on US weather outlook

CHICAGO: US wheat futures fell to near two-month lows on Wednesday on forecasts for another round of beneficial showers next week in the southern Plains production belt that could boost winter wheat production prospects, analysts said.

Chicago Board of Trade soybean futures eased while corn firmed in choppy trade.

As of 12:59 p.m. CDT (1759 GMT), CBOT May wheat was down 2-1/4 cents at $4.50-3/4 per bushel after dipping to $4.46-3/4, its lowest since Jan. 26. K.C. May hard red winter wheat was down 6-1/4 cents at $4.63-3/4 after hitting $4.58-1/4, its lowest since Jan. 26.

CBOT May soybeans were down 1-1/2 cents at $10.26-3/4 a bushel and May corn was up 1/2 cent at $3.75.

K.C. wheat futures led the declines in wheat on the potential for rains next week in the Plains hard red winter wheat belt, where crops are coming out of dormancy and resuming spring growth.

K.C. and CBOT Chicago wheat futures have been under pressure since a winter storm this week brought rain and snow to parts of the region where drought had been intensifying.

"If you believe the wettest model, you are going to get some rain into that dry area that missed the weekend rains," said Dan Cekander, president of DC Analysis.

"Some guys think they can have an average yield, in areas that were close to a disaster," Cekander said.

CBOT soybeans turned lower on technical selling, although CBOT soymeal and soyoil futures firmed.

Worries about the impact of a potential trade war on US grain and soy exports hung over the market, capping rallies, as US President Donald Trump prepares to announce on Friday up to $60 billion in import duties on Chinese goods.

"This fear of China (trade) retaliation is around every day," Cekander said. China is by far the world's largest importer of soybeans, which are the top US agricultural export.

However, market bulls noted a report issued by the US Department of Agriculture's attache in China which put soybean imports in the 2018/19 season at 100 million tonnes, up from 97 million in 2017/18.

Corn was underpinned by export demand for US supplies. The US Department of Agriculture said private exporters sold 138,000 tonnes of US corn to South Korea, marking the third such sales announcement in as many days.

Meanwhile, traders have started to shift their focus to the USDA's March 29 planting intentions and quarterly stocks reports.