Wheat succumbs to selling pressure after 3pc jump

• Wheat hit its highest in a month on Monday on a mix of short-covering and support from rising US and global cash prices.
• Corn fell 0.4pc to $3.79-1/4 a bushel while soybeans eased by 0.2pc to $8.90-3/4 a bushel.
• The Chicago closed on Monday, the US Department of Agriculture rated 52pc of the US winter wheat crop in good to excellent condition.

Soybeans also drifted down as dealers considered optimistic reports about potential progress in trade talks between the United States and China against the looming arrival of the new South American harvest on world markets.

The Chicago Board of Trade's most active wheat contract was down 1pc at $5.27-3/4 a bushel at the end of the overnight trading session.

Wheat hit its highest in a month on Monday on a mix of short-covering and support from rising US and global cash prices.

Corn fell 0.4pc to $3.79-1/4 a bushel while soybeans eased by 0.2pc to $8.90-3/4 a bushel.

"Wheat is falling on selling pressure after its strong rise on Monday," said Matt Ammermann, commodity risk manager with INTL FCStone.

"It is often the case that when wheat markets rise sharply by themselves there is almost immediately a pullback. The USDA also put winter wheat condition at slightly better than expected."

After the Chicago closed on Monday, the US Department of Agriculture rated 52pc of the US winter wheat crop in good to excellent condition, unchanged from a week earlier. Analysts surveyed by Reuters had expected 51pc on average.

"Soybeans are drifting as the market awaits more concrete news about the possible Phase 1 trade deal between the United States and China," Ammermann said.

"There were some optimistic new reports but the market needs more detail before reacting much."

China and the United States are moving closer to a deal, the Global Times, a newspaper run by the ruling Communist Party's official People's Daily, reported on Sunday.

But the report noted that Washington and Beijing had not agreed on specifics or the size of rollbacks of tariffs on Chinese goods.

Beijing's insistence that Washington roll back the Trump administration's tariffs has been a major sticking point.

"The lifting of US punitive tariffs on Chinese goods is one of the main demands of the Chinese before they sign up to any agreement that, among other things, would require them to commit to huge purchases of US agricultural products," Commerzbank said in a note.

Competition to US supplies was underlined as Chinese buyers bought at least 20 cargoes of Brazilian soybeans as they sought to lock in supplies.