GRAINS-Wheat Drops as Crop Weather Improves; Soybeans Firm

May 8th, 2018


Category: Grains, Miscellaneous, Oilseeds

(  Chicago wheat fell again on Tuesday, hitting a
one-week low as an improvement in crop prospects in major exporting regions and
concern U.S. wheat exports are looking too expensive weighed on prices.
Soybeans rose in bargain hunting following Monday’s sharp fall.
The Chicago Board of Trade most-active wheat contract was down 0.2
percent at $5.10 a bushel at 1141 GMT, after earlier hitting its lowest since
May 1 at $5.06-3/4 a bushel.
Soybeans rose 0.5 percent to $10.17-1/4 a bushel, having fallen 2.4
percent on Monday. Corn edged up 0.1 percent to $4.01-1/2 a bushel,
receiving some spillover support from soybeans.
“Wheat is seeing weakness from forecasts of more rain in Australia and the
Black Sea and better weather in the U.S. Plains after the serious concerns about
dryness there which drove prices up last week,” said Matt Ammermann, commodity
risk manager with INTL FCStone.
“Chicago wheat seems to have risen too fast and too high last week and after
comparing global prices, U.S. wheat looks too expensive.”
Concern about drought in the U.S. Plains and elsewhere lifted wheat to
nine-month highs last week.
But improved weather forecasts have become a catalyst for selling pressure,
said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of
“The last few projections have some wetter weather in very dry hard red
winter wheat regions of the U.S.,” Gorey said.
Better news about U.S. harvest prospects came after the Chicago close on
Monday, when the U.S. Department of Agriculture (USDA) rated 34 percent of the
U.S. winter wheat crop in good-to-excellent condition, up from 33 percent last
Russia is on track for a record wheat crop, while Ukraine is expecting a
bumper harvest in the months ahead.
“Monday’s fall in soybean prices seems to have been a bit overdone in view
of the continued concern about the reduced Argentine soybean crop this year,”
Ammermann said.
“The soybean market is now moving to assess fair value as we move into the
U.S. planting season. Soybean planting in some of the U.S. northern states has
made a slow start and there will be greater focus on U.S. soybean planting
progress in coming weeks.”
The USDA said on Monday the U.S. corn crop was 39 percent planted, up from
17 percent last week.
“U.S. corn plantings speeded up last week,” Ammermann said. “U.S. corn
plantings are still behind the usual rate but are catching up.”
Grains prices at 1141 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 510.00 -1.50 -0.29% -3.09% 491.98 58
CBOT corn 401.00 0.25 +0.06% -1.29% 395.93 54
CBOT soy 1016.75 5.25 +0.52% -1.93% 1045.43 32
CBOT rice $12.79 $0.02 +0.16% -1.08% $13.00 31
WTI crude $69.94 -$0.79 -1.12% +0.32% $66.71 63
Euro/dlr $1.187
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight


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