Wheat lower

US wheat futures dropped 3.2 percent o n Tuesday, hitting their lowest level in more than a week due to technical selling coupled with rain in crop-producing areas of Russia and Australia that eased concerns about dry weather denting global supplies.
Traders noted some pull-back from Friday's 2.6 percent rally in Chicago Board of Trade wheat and said regulatory data that showed large speculators had covered a substantial portion of their net short position in the commodity limited any upside. Fresh worries about the global economy added to the bearish cloud hanging over wheat prices. "I think people looked at the Commodity Futures Trading Commission report and saw that the funds covered a huge portion of their short position on wheat," said Jim Gerlach, president of A/C Trading, a brokerage in Fowler, Indiana.
"That tends to lead to back-and-fill-type trading a little bit. You have let all the scared money out." At 1:48 pm CDT (1848 GMT), CBOT July wheat was down 22-1/2 cents at $6.57-1/2 a bushel. Wheat prices fell below last week's low early in the session, which prompted a fresh round of technical sales. CBOT July corn fell 17 cents to $5.61-1/2 a bushel while CBOT July soyabeans rose 4-1/2 cents to $13.86-1/2 a bushel.
Early harvest in the southern US Plains added further pressure to wheat prices, which notched their biggest daily loss in percentage terms in nearly four weeks. Corn futures also fell sharply, weighed down by soyabean/corn spreading as well as forecasts for rain in the US Midwest. Soyabeans edged higher, supported by concerns that the rains will fail to help soya crops as much as corn and that harvest will fall short of satisfying rising global demand. "There is not enough rain to get beans up and out of the ground," said Mark Schultz, chief market analyst with Northstar Commodity Investment Co.
Traders also said the soya market, which has fallen nearly 8 percent during May, was due for a bounce. "The soyabean market is a little more oversold than the other markets are," said Dewey Strickler, president of AgWatch Market Advisors. Rains are forecast for the US Midwest on Wednesday through Friday, said Andy Karst, meteorologist for World Weather Inc. Showers will be heaviest in areas west of the Mississippi River, with parts of Iowa, Missouri and Nebraska receiving as much as 2 inches (5 cm).
Rain is also seen in portions of the lower Midwest, providing critical relief to stressed corn crops in those areas, although more will be needed to foster development. Traders said rain was unlikely to penetrate the dry subsoils that were slowing soyabean emergence.