Chicago Board of Trade wheat futures sank 2.9 percent on Monday, hitting a two-week low on expectations that drier conditions in the US Plains will allow farmers to harvest a bumper crop, traders said. Corn futures also fell, hitting new contract lows amid pressure from good weather for crop development across the US Midwest.
A US Department of Agriculture report on Monday afternoon was expected to show that good-to-excellent ratings for both corn and wheat were expected to be unchanged from a week earlier. "Unless this afternoon's crop ratings show marked deterioration, it will be difficult to keep prices from grinding lower into harvest," Farm Futures market analyst Bryce Knorr said in a research note to clients.
CBOT July soft red winter wheat settled down 14-1/2 cents at $4.89-1/4 a bushel, its fourth straight session of declines following a rally to their highest in more than two months last week. K.C. July winter wheat, which tracks the crop harvested in the US Plains, fell 3.3 percent. Weather outlooks called for dry weather that will allow wheat farmers to run their combines through fields, adding to the already abundant supply situation in the United States, pressuring the market.
"We are going to see some heavy rains across the south-eastern Plains over the next several days," said Kyle Tapley, an agricultural meteorologist with MDA Weather Services. "But once we get that out of the way, this week into next week looks significantly drier across Texas, Oklahoma and into southern Kansas." CBOT corn for July delivery ended down 6 cents at $3.47 a bushel. Prices fell through key technical support at the 30-, 40- and 50-day moving averages before hitting a contract low of $3.46-3/4 a bushel.
Dealers said the market was continuing to keep a close watch on developments in China, with the world's second-largest corn consumer likely to take steps to curb imports of corn and substitutes such as sorghum and barley. CBOT July soyabeans were 2-1/4 cents lower at $9.37-3/4 a bushel, with weakness in soyameal futures leading the way lower. Traders also said that soyameal exports in the National Oilseed Producer Association's monthly crush report were lower than expected, despite being the third highest total for May on record.