SINGAPORE: US wheat slid around half a percent on Tueday, falling for a fifth time in six sessions, as forecasts of crop-friendly weather in the US Plains and Australia's estimate of a record large harvest weighed on the market.
Soybeans were little changed, hovering near a four-month top on concerns of dryness in Brazil, which could further damage the crop following a drought in January that curbed South American crop yields.
"It is a massive output. Australia will be competing in the world market through the end of the year even when the other origins come in," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne, referring to Australia's wheat production forecast.
"For soybeans, it seems like dryness has now shifted to southern Brazil, which has certainly got the market excited."
Chicago Board of Trade March wheat fell 0.4 percent to $6.38-3/4 a bushel by 0335 GMT. March soy fell 0.1 percent to $12.50-3/4 a bushel and corn for March delivery lost 0.2 percent to $6.38-1/4 a bushel.
Australia on Tuesday lifted its forecast for wheat production this year by 4.2 percent to a record 29.5 million tonnes from 28.3 million previously, saying key growing regions completed harvesting before the onset of heavy rains.
The higher output forecast for Australia which adds to the amply supplied global market is more than the 28.3 million tonnes estimated by the US Department of Agriculture in its monthly global demand and supply report last week.
USDA report showed the world ending stocks at 213.10 million tonnes, up from the January outlook of 210.02 million tonnes and above analysts' expectations for 208.963 million tonnes.
A wintry mix of rain and snow is expected through much of the US Plains this week, boosting soil moisture conditions in wheat-growing areas. The cold snap is not seen dropping temperatures low enough to harm any of the winter wheat crop, said Don Keeney, meteorologist for MDA EarthSat Weather.
US Agriculture Department estimated US wheat plantings for the 2012/13 crop year at 56.5 million acres in its annual baseline projections. A year ago, US farmers seeded 54.4 million acres of wheat.
There was additional pressure on grains and oilseeds from weakness in global financial markets amid concerns over the euro zone debt crisis.
Shares and the euro slipped on Tuesday, as initial relief over Greece's approval of harsh austerity measures in exchange for crucial aid gave way to doubts about Athens' ability to pursue the reforms, with social unrest intensifying.
The euro and sterling fell after rating agency Moody's reminded investors that Europe was still deeply mired in the debt crisis, warning it may cut the top-notch ratings of France, the United Kingdom and Austria while downgrading Italy, Portugal, Spain, Slovakia, Slovenia and Malta,
In the soybean market, traders noted stressful hot and dry weather which is expected in southern Brazil.
Trade anticipates that China's Vice President Xi Jinping will likely sign a deal to purchase US soybeans this week during a visit to Iowa, the top US soybean state. The visit underscores the possibilities of the deepening agricultural trade relationship between China and the United States.
A US government report showed farmers in the United States will plant the largest area with corn this spring since World War Two, which could double the razer-thin stocks of this year and help defray costs to consumers and food companies.
The US Department of Agriculture's baseline projections the first of a series of estimates that will help shape prices across the globe pegged corn acres at 94 million, the most since 1944 and near trade expectations for 94.2 million.
Comments
Comments are closed for this article.