US wheat futures surged over 3 percent on Tuesday after the US Department of Agriculture slashed its estimate for production in top exporter Russia. Corn futures jumped more than 2 percent while soyabeans notched more modest gains in the wake of the monthly USDA supply and demand report at midday. The agency also lowered its forecasts for US corn and soya ending stocks for the 2018/19 crop year that begins on September 1.
Prices for all three commodities recovered from recent steep declines, with soyabeans rebounding from a roughly 10-month low.
"We went into this report with a lot of liquidation going on, technically oversold; you were kicking the dog. Now you've got a report that is a little bit friendly, a relief rally and also weather on the backdrop," said US Commodities analyst Don Roose.
The USDA late on Monday reduced good-to-excellent crop condition ratings for the corn and soya crops by 1 percentage point, but the ratings still are some of the best in years while weekend rainfall in the Midwest also benefited crops.
Chicago Board of Trade July corn was up 10 cents at $3.77-1/4 per bushel and CBOT July soyabeans were up 6 cents at $9.59-3/4 as of 11:58 a.m. CDT (1658 GMT).
CBOT July wheat gained 19 cents to $5.33-1/2 per bushel, on pace for the biggest daily percentage increase since May 18.
The USDA raised its estimate of all US wheat production for 2018/19 by 6 million bushels to 1.827 billion bushels but it cut its Russia wheat harvest estimate to 68.50 million tonnes from 72.00 million tonnes.
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