US wheat drops on Russian exports, corn dips on weather

Corn extended losses in early Asian trade on forecasts of a near-perfect weather, while soybeans were little changed.

FUNDAMENTALS

US wheat is facing stiff competition from Russian suppliers. Jordan purchased 150,000 tonnes of Russian hard wheat, marking the first major success by Russian wheat following the end of the country's grain export ban on July 1.

Egypt's main state wheat buyer set a tender to buy wheat from global suppliers, including Russia in the mix for the first time since Moscow's return to the world export market this summer.

US wheat harvest was running ahead of the typical pace and yields were not as bad as expected despite dry weather around the southern US Plains during the growing season. The US Agriculture Department said on Tuesday that winter wheat harvest was 56 percent complete, 4 percentage points better than the five-year average.

USDA's shocking planting and stocks report last week, which came in higher than expected for most metrics, is making traders wary of coming back to the market until they see what the government's upcoming supply and demand report shows next week.

US corn is benefiting from near perfect growing conditions as the bulk of the crop heads toward pollination, its yield-determining phase, Telvent DTN forecaster Mike Palmerino said on Wednesday. Mostly clear skies with an occasional shower this week should lift crops, which are behind in development after a cool, wet spring.

MARKETS NEWS

The euro slid against the US dollar for a second straight day on Wednesday as a China interest rate hike raised global growth concerns in a market already unnerved by the downgrade of Portugal's debt to junk.

Oil prices settled near flat on Wednesday, buffeted in low-volume trade as an interest rate hike by China and Europe's debt woes kept demand concerns in focus ahead of weekly reports expected to show a drop in US crude stocks.

Transportation stocks were among the standouts in another flat session for US equities, and the sector's rally could be cause for optimism ahead.

Copyright Reuters, 2011