US corn, wheat stay weak on improving crop prospects

CHICAGO: Chicago corn futures fell further on Wednesday as improved crop ratings and drier weather were seen boosting US production prospects after torrential spring rains, analysts said.

Wheat futures also declined as the US winter wheat harvest progressed, while soybean futures turned higher after early weakness.

Price movements were limited as traders adjusted positions ahead of Thursday's monthly supply and demand forecasts from the US Department of Agriculture. The report is drawing extra interest after the USDA surprised the market with a higher-than-expected estimate of US corn plantings on June 28.

"Traders are just prepping for those reports tomorrow," said Bill Gentry of Risk Management Commodities.

Futures traders have been holding their breath since the USDA acreage report in late June.

"I hope that the USDA will acknowledge the situation in this [July's] report and edit accordingly," Gentry said.

Analysts surveyed by Reuters on average expected the government to lower its estimates of US 2019 corn and soybean yields in Thursday's report.

September corn futures on the Chicago Board of Trade were down 2-1/4 cents at $4.30-1/4 a bushel by 10:48 a.m. (1548 GMT), after dipping to $4.27, its lowest in a week.

August soybean futures were up 2-1/2 cents to $8.88-1/2 a bushel.

Improving US crop prospects hung over the market. The USDA on Monday rated 57% of the US corn crop as good to excellent, up from 56% the previous week. But soybean ratings declined, with 53% of the oilseed crop seen as good to excellent, down from 54% a week earlier.

Warmer weather in the heart of the US Midwest this week has raised concern about potential crop stress. But the warm spell may also benefit crops by drying out soggy fields and accelerating plant growth.

"For the short term, this (hot and dry) weather is good," said Gentry. "But after about a week of this weather, the corn will start to show some deterioration."

CBOT September wheat futures were down 3/4 cent at $5.02 a bushel, hovering around psychological support at the $5 level. The contract earlier fell to $4.98, its weakest since June 6.

Some 47% of the US winter wheat harvest was completed by Sunday, the USDA said, above trade expectations for 45%.

Decent harvest prospects across Europe, despite some forecast downgrades in Russia, and stiff export competition illustrated by an Egyptian tender on Wednesday were adding to negative price sentiment in wheat markets.