Chicago corn and wheat futures turned lower on Tuesday as mostly favourable conditions for US crops diverted attention away from adverse weather overseas and encouraged markets to consolidate after a four-session rally. US soyabeans also gave up most of earlier gains but stayed marginally higher as the market continued to expect strong export demand as South American supplies are curbed by rain damage to the Argentine harvest.
Chicago Board of trade most-active corn was down 0.4 percent at $4.25-3/4 a bushel by 1121 GMT. Wheat was 0.9 percent lower at $5.02-3/4 a bushel, pulling back from Monday's six-week high of $5.14-3/4. Soyabeans added 0.2 percent to $11.40-1/2. In a weekly update released after the market close on Monday, the US Department of Agriculture (USDA) said US farmers have nearly completed planting corn, and that 75 percent of the crop is in good-to-excellent condition, a score that beat market expectations.
Winter wheat ratings fell by one point to 62 percent, but the relatively good score coupled with drier weather for the US harvest under way have underlined ample US supplies. "The crop conditions displayed by USDA yesterday remain satisfactory," French consultancy Agritel said in a note. "However, US operators are cautious about the medium term and are integrating a summer risk premium."
Grain investors are monitoring the potential for a La Nina weather pattern that could lead to a dry US summer, seen as more of a risk for soyabeans that develop later than corn. The USDA estimated that 72 percent of soyabeans crops were in good or excellent condition. Planting progress was below expectations but still ahead of the average pace of recent years.
Crop concerns were also tempered by drier, warmer weather in France, where torrential rain has raised the risk of yield and quality downgrades ahead of summer harvesting. In corn, early harvested crop reaching the market in Brazil was cooling record high prices, analysts said on Monday. A supply squeeze in Brazil has fuelled a strong run of US shipments, as confirmed by weekly US export inspections near the high-end of market forecasts.
Expectations of lower supplies from Argentina continued to support the soyabean market. "We are seeing pretty bullish moves in soyabeans as US old-crop stocks are tightening and importers are rushing to cover supplies," said Kaname Gokon at brokerage Okato Shoji in Tokyo. Traders were now starting to look ahead to Friday's monthly supply-and-demand forecasts from the USDA, which analysts expect to show a trimming of US corn and soyabean ending stocks for the current season.