US wheat futures sank 1.3 percent on Tuesday, flirting with five-year lows after rain in key production areas boosted harvest prospects as the crop nears maturity, traders said. Poor export demand for US supplies and strong yield projections from early results of a crop tour through Kansas also pressured the market. Egypt on Tuesday said it bought Russian and Romanian wheat in its latest deal that totalled 120,000 tonnes, again bypassing US offerings.
"It was pretty widely expected," Jefferies Bache grains analyst Shawn McCambridge said. "But it is just another reminder of how uncompetitive we are in those markets." Corn futures closed higher, with bargain buyers stepping into the market after the most active July contract hit its lowest in seven months. But a government report that showed US farmers were ahead of schedule in their planting kept a bearish tone over the market.
Soyabeans rose, supported by gains in the soyaoil market for the second day in a row amid talk of strong overseas demand. Firm cash markets also boosted soyabeans. Chicago Board of Trade soft red winter wheat for July delivery settled as down 6-1/4 cents at $4.66-1/2 a bushel. K.C. July hard red winter wheat was 8 cents lower at $4.90-1/4 a bushel. The US Department of Agriculture rated 43 percent of winter wheat as good or excellent, up one percentage point from the previous week and close to the five-year average of 46 percent.
Traders were digesting early results from the Wheat Quality Council's annual tour of Kansas, the biggest US production state for hard red winter wheat. Despite mixed reports, traders said the projected yields were generally above expectations. CBOT July corn ended up 1-1/2 cents at $3.62-3/4 a bushel, snapping a three-day stretch of losses. Ideal planting weather for crops in the central US Corn Belt last week resulted in a sharp jump in seedings that bodes well for root production and final yields, state crop reports showed on Monday. "Even in the eastern Corn Belt, subject to earlier delays, planting progressed rapidly," Tobin Gorey, director of agricultural research at Commonwealth Bank of Australia, said in a note to clients. CBOT July soyabeans were 8-1/2 cents higher at $9.84-3/4 a bushel.
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