CHICAGO: US corn futures dropped on Tuesday on forecasts for good spring planting weather, which eased concerns about a lower-than-expected acreage outlook from the US Department of Agriculture (USDA) last week. Soybeans firmed on rallying soyoil and worries that an expansion of corn planting could reduce acres devoted to soy planting in the United States.
Wheat futures fell after the USDA reported winter crop conditions at the highest in five years and as more rain is forecast for the Plains farm belt in the next 10 days. Grain traders are monitoring Midwest weather forecasts as planting season nears to gauge whether the government’s acreage outlook released late last week will shift.
The USDA pegged US corn acres well below expectations, and favourable planting weather could trigger an expansion of seedings. “We’ve got more moisture in the Midwest and a warming trend into the next week,” said Don Roose, president of US Commodities.
Normal to above-normal rains are expected in much of the Midwest corn belt in the six to 10 day period, followed by a drier pattern that could accelerate seeding, according to a Commodity Weather Group forecast.
Chicago Board of Trade May corn fell 6-1/2 cents to $4.29 a bushel by 10:43 a.m. CDT (1543 GMT), while May soybeans rose 2 cents to $11.87-3/4 a bushel. CBOT May wheat fell 11-3/4 cents to $5.63-3/4 a bushel. In its first national crop progress report since before winter, the USDA on Monday rated 56% of the US winter wheat crop in good-to-excellent condition.
That was below average trade expectations but above a pre-winter score of 50% and the highest for this time of year since 2019. Strength in the dollar, which on Tuesday set another 4-1/2 month peak against a basket of major currencies, was denting the export competitiveness of wheat and other US crops. Chicago wheat futures rose on Tuesday but remained close to their lowest level since 2020 amid expectations of strong supply and as a rising dollar made US farm exports costlier for importers. Soybean and corn futures inched higher. The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.3% at $5.58-1/2 a bushel by 0335 GMT, but prices are still down 11% this year and fell to $5.24 last month, the lowest since August 2020.
“Large supplies of wheat and other grains such as corn are weighing on pricing,” said Andrew Whitelaw at Australian agricultural consultancy Episode 3. “Heavy exports (of wheat) from Russia are a cause for concern,” he said. “With a lack of new bullish information, we expect pricing to remain relatively flat with bearish overtones.” The US Department of Agriculture (USDA) in its first weekly crop progress report of the 2024 growing season rated 56% of the US winter wheat crop in good-to-excellent condition, below an average of trade expectations but still the highest for this time of the year since 2019.
Last week, the USDA said US wheat stocks had risen more than expected, while reporting higher soybean and corn stocks and a likely fall in corn planting.
Russian wheat export prices rose for the third week in a row last week, analysts said, and the country was estimated to have exported 4.9 million metric tons in March, the most for any March on record. The US dollar on Monday and Tuesday reached its highest level against a basket of major currencies since mid-November.
In other crops, CBOT soybeans were up 0.1% at $11.87 a bushel and corn climbed 0.1% to $4.36 a bushel. Corn and soybeans are, like wheat, near their lowest since 2020 due to plentiful supply, and speculators hold large net short positions. Commodity funds were net sellers of Chicago corn, wheat and soybeans on Monday, traders said. Ukraine’s grain exports fell to around 5.2 million metric tons in March from 5.8 million tons in February, something blamed on Russian shelling interrupting operations at seaports and Polish protesters’ blocking of land exports.
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