US MIDDAY: wheat drops

US wheat futures tumbled more than 2 percent early on Wednesday, erasing two sessions of gains, as forecasts for rain in some dry areas of the southern Plains eased concerns about reduced yields. Corn and soybeans also declined as traders adjusted positions ahead of the US Agriculture Department's planting intentions and quarterly US stocks reports scheduled for release on Thursday.
"We are seeing some wheat selling pressure today after its strong rises in the past few days after concern about cold and dry weather in the southern US Plains," said Stefan Vogel, head of agricultural commodity markets research at Rabobank.
Chicago Board of Trade May soft red winter wheat was down 12-1/2 cents, or 2.6 percent, at $4.64-1/4 a bushel by 11:39 am CDT (1639 GMT), the steepest percentage drop since early November. Selling accelerated as the contract dropped below its 50-day moving average around $4.68-3/4.
May hard red winter wheat tumbled 13-3/4 cents, or 2.9 percent, to $4.68 a bushel, breaching both its 50- and 100-day moving averages in the process. Although a portion of the HRW wheat belt could remain dry, updated forecasts indicate a better chance for rain in the central and south-east Plains over the next two weeks, the Commodity Weather Group said in a note.
CBOT May corn was down 3-1/2 cents, or 0.9 percent, at $3.69-1/2 per bushel after touching a two-month high of $3.74 early in the session. The contract fell below its 100-day moving average after closing above the key technical level on Tuesday for the first time since October. CBOT May soybeans shed 5-1/2 cents, or 0.6 percent, to $9.10-1/2 a bushel after hitting a 3-1/2 month high a day earlier.
The USDA on Thursday will release its closely watched US spring planting estimates alongside quarterly grain stocks data. Analysts on average expect March 1 soybean stocks at their largest since 2007 and corn stocks at their highest since 1987. The market is still digesting news that China is scrapping its stockpiling scheme for corn, a move that could reduce Chinese imports of feed grains. Beijing intends to allow markets to set prices for the grain, the State Administration of Grain said in a statement.