Chicago wheat futures fell nearly 3 percent on Monday as rain in dry US areas encouraged the market to stay within its trading range after weather worries drove prices to a three-week high. Traders were awaiting US government crop data later on Monday to see if weekend rain helped wheat. Poor ratings for the grain in the previous report fuelled last week's rally.
Corn and soyabeans dipped on spillover selling pressure. Chicago Board of Trade December wheat was down 2.8 percent, or 14-1/2 cents a bushel, at $5.07-1/2 by 10:06 am CST (1606 GMT). It earlier climbed close to Friday's three-week peak of $5.23-1/2. The sell-off was probably not based on fundamental reasons but reflects a pullback to stay within a trading range, said Austin Damiani, commodities broker at Frontier Futures in Minneapolis.
"The fundamentals of the market are known," he said. Trading has stayed beneath the December wheat contract's 200-day moving average of around $5.24-1/2 per bushel, a key resistance level, Damiani noted. Light weekend rain reached some dry zones in the central US Plains and south-western Midwest, Commodity Weather Group said in a daily update.
The US Department of Agriculture's weekly crop progress report, due after markets close on Monday, will provide further indications of the condition of US wheat, as well as progress in harvesting corn and soyabeans. Early trade expectations were for the government to rate 48 to 50 percent of the US winter wheat crop as good to excellent, up from 47 percent a week earlier. The risk that pre-harvest rain could damage quality in Australia's wheat crop was also increasing doubts about yields after a dry end to the growing season.
CBOT December corn fell 1.4 percent, or 5-1/2 cents, to $3.76-3/4 per bushel. Plentiful US corn supplies hang over the market, but cash markets have been firm in the interior Midwest. November soyabeans gave up 1 cent to $8.82-3/4 a bushel. Selling pressure in wheat and corn spilled over to soyabeans, said Mike Zuzolo, president of Global Commodity Analytics in Indiana.
"There's only so much that strong export demand can do for soya," he said. Sustained Chinese demand had sheltered the market from worries that China's slowing growth would affect other commodities. Private exporters reported sales of 120,000 tonnes of US soyabeans to China for delivery in 2015/16, the USDA said on Monday.
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