Spring wheat futures on the Minneapolis Grain Exchange closed lower on Tuesday, backing off advances tied to a drop in US winter wheat condition ratings, traders said. "There was no follow-through on the rally, and it fell apart," one trader said.
Light commercial hedge-related selling weighed on the market. May spring wheat settle down 1 cent at $5.14-1/4 per bushel, with July down 4 cents at $5.08 and December down 4-1/2 at $5.18-1/2.
The May/July spread traded at an inverse of 4-1/2 to 6 cents. Volume was estimated by the exchange at 9,653 contracts, up from 7,247 on Monday. Values opened strongly higher after the US Department of Agriculture late on Monday said 55 percent of the US winter wheat crop was in good to excellent condition, down 9 points from the previous week's rating of 64 percent good/excellent.
The downgrade reflected damage from a widespread freeze this month. Because some the steepest declines were noted in soft red winter (SRW) wheat states including Arkansas, Missouri and Illinois, SRW wheat futures in Chicago led the charge higher.
CBOT May wheat settled up 2-1/4 cents at $4.77-1/2. But the Minneapolis and Kansas wheat markets retreated on ideas of overbought conditions and that the crop damage had already been factored into prices. Minneapolis traders shrugged off signs of a slow start to spring wheat planting. The USA's report pegged US spring wheat seedlings at 6 percent complete, up 4 percent from the previous week but lagging the five-year average of 15 percent.
The crop was 2 percent emerged, matching the five-year average. In export news, Japan said it would buy 145,000 tonnes of Canadian Australian and US wheat at its weekly tender.