Soybeans and corn firm on concern over US crop conditions

HAMBURG: Chicago soybean and corn futures rose on Tuesday after the US Department of Agriculture (USDA) said the condition of both crops in the United States is declining.

Wheat rose after suffering sharp losses on Monday, recovering on expectations for smaller crops in rival exporters to the United States.

The Chicago Board of Trade's most-active soybean contract

rose 0.5 percent to $8.50-3/4 a bushel by 1039 GMT. Soybeans had hit their lowest in about 10 years on Monday on fears about the US-China trade dispute, but recovered to finish with a gain of 1.4 percent.

Corn

was up 0.9 percent at $3.58-1/2 a bushel, having risen by 0.1 percent on Monday. Wheat

rose 1.1 percent to $4.93-3/4 a bushel, having fallen by 1.7 percent on Monday.

After Monday's close the USDA said that 69 percent of the US soybean crop is in good to excellent condition, down from 71 percent a week ago but still above the 61 percent at the same time last year.

The USDA said that 72 percent of the US corn crop is in good to excellent condition, below last week's 75 percent.

"Soybeans and corn are being underpinned by declines in US crop conditions seen by the USDA and wheat is supported by crop problems in rival exporters to the US in Europe and the Black Sea (region)," said Matt Ammermann, commodity risk manager with INTL FCStone.

"The decline in condition of the US soybean crops is fuelling belief that US crop yields are slowly getting lower and not higher. But the US is still facing a pretty good harvest and a lot can still change as we go into August, the key month for crop development."

"There is some buying interest in soybeans at the current low level."

The US-China trade war has been weighing on the soybean market, which dropped to the lowest level since December 2008 on Monday. Chinese buyers have purchased soybeans from Brazil, instead of the United States.

"China seems to be massively buying Brazilian soybeans because of the trade war with the US," Ammermann said. "This has pushed up Brazilian soybean premiums and made the US cheaper. The question is when this price gap between the US and Brazil will get too wide and will need correcting."

"With US soybean export prices about $66 a tonne below Brazil, there is a feeling we could be reaching this point."

Wheat is underpinned by expectations of smaller crops in Europe and the Black Sea region, with Germany, Russia and Ukraine among regions with problems.