US MIDDAY: wheat drifts lower

Chicago Board of Trade soft red winter wheat futures fell early on Monday on seasonal pressure from the start of the US winter wheat harvest, analysts said, while corn and soyabean futures were little changed. Spring wheat futures on the Minneapolis Grain Exchange (MGEX) continued to climb, supported by dry conditions in the northern US Plains.
As of 12:44 pm CDT (1744 GMT), CBOT July wheat was down 1-1/4 cents at $4.28-1/4 per bushel while MGEX July spring wheat was up 4 cents at $5.87-3/4. CBOT July corn was down 1/2 cent at $3.72-1/4 a bushel while July soyabeans were up 3/4 cent at $9.22 a bushel. "Seasonal selling pressure continues to weigh on wheat prices," INTL FCStone chief commodities economist Arlan Suderman said in a note to clients.
The US Department of Agriculture's weekly crop progress report later on Monday is expected to show the US winter wheat harvest as 7 percent complete by Sunday, a Reuters analyst poll showed. Analysts also expected the USDA to show a decline in its condition ratings for the US spring wheat crop, which has struggled with hot and dry weather in the Dakotas. Temperatures in Aberdeen, South Dakota, reached a record-high 100 degrees Fahrenheit (37.8 Celsius) on Friday, the National Weather Service said.
Fears about diminishing spring wheat yield potential lifted the premium for front-month MGEX spring wheat futures above K.C. hard red winter wheat futures to about $1.59 a bushel, the widest since June 2012. CBOT soyabean futures were modestly higher, supported by technical buying and fund short-covering after the supplement to the US Commodity Futures Trading Commission's weekly Commitments of Traders report showed that funds expanded big net short positions in soyabeans and corn.
Large speculators stretched their net short in CBOT soyabean futures to 113,391 contracts in the week to May 30, the CFTC report showed, the widest since March 2016. A large net short position leaves the market vulnerable to bouts of short-covering. Also bullish, the USDA said private exporters sold 120,000 tonnes of US soyabeans to unknown destinations.
Traders expected the USDA later on Monday to rate 67 percent of the US corn crop as good to excellent, up from 65 percent a week earlier as drier weather bolstered fields in saturated areas.