Corn steadies on crop tour yields, wheat stuck at 3-month low

PARIS/SINGAPORE: Chicago corn futures edged up on Wednesday to recover from a three-month low in the previous session after a major US field tour forecast lower corn yields this year in some states.

Soybean prices gained for a second session, also drawing support from the crop tour findings.

Chicago wheat, however, reversed a small earlier rise to hit a new three-month low, pressured by weakness in Paris futures as wheat markets remained weighed down by large harvests in Europe and the Black Sea region.

Traders also cited technical moves as the market tested lows in relatively thin volumes.

The most-active corn contract on the Chicago Board of Trade had risen 0.3% to $3.69-3/4 a bushel by 1047 GMT, after dropping on Tuesday to its lowest since mid-May at $3.68-1/4.

"The market is looking at the crop tour and there is some support," said Darin Friedrichs, Shanghai-based Senior Asia commodity analyst at INTL FCStone.

"Last night prices were under pressure, the weather forecast looks fine as of now but there will be concerns over yields if it gets too cold in September as the crop was planted late."

A closely watched crop tour in the US Midwest is forecasting lower corn yields than last year.

The Pro Farmer Midwest Crop Tour on Tuesday projected Indiana corn yields at 161.46 bushels per acre (bpa), below both last year's level and the three-year average.

It also forecast Nebraska corn yields would fall from last year although the 172.55 bpa estimated would be above the tour's three-year average.

Grain markets have been wrestling with corn harvest potential after an increased government forecast last week wrongfooted many investors focused on the negative impact on crops of torrential spring rain and dry summer spells.

Soybeans added 0.6% to $8.73 a bushel.

The Pro Farmer tour also estimated soybean pod counts in Indian and Nebraska would be below both 2018 and the three-year mean.

The soybean market remained capped by a large South American harvest and uncertain export demand given a protracted US-Chinese trade dispute.

CBOT wheat was down 0.8% at $4.63 a bushel, after earlier setting a fresh three-month low at $4.62-1/2.

In Paris, December wheat fell to a new life of contract low at 169.00 euros ($187.57) a tonne.

"On the fundamental side the demand is weak and there is plenty of wheat so it's quite tough," a European trader said.

Ukraine's 2019 wheat harvest is expected to rise to 27.72 million tonnes from 24.83 million tonnes last year, while exports could reach 21 million tonnes in the 2019/20 season compared with 15.53 million in 2018/19, according to data from grain trader union UZA.