US MIDDAY: wheat tumbles

Chicago Board of Trade wheat futures plunged as much as 3 percent on Tuesday, heading for their largest daily losses in three weeks on pressure from ample global grain supplies and following declines in Euronext wheat, traders said. Wheat on the Paris exchange was heading for its second straight session of steep losses, correcting after hitting the highest levels since January on Monday.
Reduced estimates for the harvest in the top exporting region of the European Union had propelled wheat higher late last week but investors now were waiting for fresh bullish news before making further long bets. Farmers in the United States were nearly done harvesting wheat fields that had largely better-than-expected yields, and were hedging their harvested supplies, further weighing on futures, brokerage INTL FCStone said in a note to clients.
CBOT September wheat was down 13-1/2 cents at $4.15-1/2 per bushel as of 12:05 am CDT (1705 GMT), still holding above their nine-year low of $4.06-1/2 reached on July 20. CBOT December corn fell 2 cents to $3.39-1/4 per bushel, following the declines in wheat and consolidating above its life-of-contract low of $3.33-1/4 from Friday. Soyabean futures for November delivery jumped 8 cents at $9.74-1/2 per bushel, rebounding after Monday's three-month lows.
"It's a little short-covering rally and there's a little heat coming in the first week of August," Highground Trading broker Scott Capinegro said. He added that investors were also cleaning up their positions as the month drew to a close. The CME Group showed open interest in soyabean futures declining during Monday's session of lower prices, suggesting long liquidation.
Extended weather forecasts reaching into August, seen as the most crucial month for establishing US soyabean yields, showed sufficient precipitation that could help offset the potential for stress caused by high temperatures. Midday weather models on Tuesday showed a stronger ridge of high pressure in the central United States growing belt that could lead to increased dryness, according to an agriculture meteorologist at Lanworth, a division of Thomson Reuters.
The US Department of Agriculture after the close of trading on Monday left good-to-excellent condition ratings unchanged for the US soyabean and corn crops, when analysts were predicting slightly lower ratings due to heat. Historically high US crop ratings increased the likelihood for higher-than-normal yields at harvest, analysts said. "I can't be friendly (to higher prices) when I look at this weather," Capinegro said.