Wheat falls 2.4 percent on record-fast harvest

CHICAGO Tue Jun 5, 2012 7:18pm EDT

Large fields of corn growing in fields in Otisco, Indiana, August 25, 2009. REUTERS/John Sommers II

Large fields of corn growing in fields in Otisco, Indiana, August 25, 2009.

Credit: Reuters/John Sommers II

CHICAGO (Reuters) - U.S. wheat fell 2.3 percent on Tuesday, declining for the sixth time in the last seven sessions, as the dollar firmed and the harvest in the United State progressed at a record pace.

Corn futures also eased, with the new-crop December contract shedding 3.0 percent, as U.S. crop conditions stabilized and the rising greenback limited demand for exports priced in the U.S. currency.

"(The wheat) harvest is making good progress and, while we have some areas that don't have the best yields, there are pretty good yields in most places," said Joe Christopher, analyst and grain merchandiser at the Crossroads Co-Op in Sidney, Nebraska.

"The world weather forecast is looking a little more favorable and the wheat had run up too big of a premium to corn," he said.

Chicago Board of Trade July wheat settled 14-1/2 cents lower at $6.13-1/4 per bushel, just off the two-week low notched on Friday.

Tight corn stocks capped losses in CBOT July corn, which settled 1/2 cent lower at $5.67-1/2. Wheat's premium to corn was about 46 cents per bushel on Tuesday, compared to more than $1 about two weeks ago.

"The market is trying to price wheat back into feed rations," said ABN Amro analyst Charlie Sernatinger.

CBOT July soybeans ended 9-1/2 cents higher at $13.49-1/2, a gain of about 1 percent after hitting a three-month low last week, boosted by lower-than-expected U.S. crop ratings and a cut in the Brazilian production forecast.

"The soybeans have reached some value. We're getting ever so close to a crop report and that will probably show some tightness here and in the world," said Don Roose, analyst at U.S. Commodities in West Des Moines, Iowa.

In the first condition rating of the year, the U.S. Agriculture Department late on Monday pegged the U.S. soybean crop at 65 percent good to excellent, below analyst expectations of 69 percent.

The corn crop was 72 percent good to excellent, unchanged from a week ago. Analysts expected the government to rate the crop at 71 percent due to continued dry weather in southern areas of the Corn Belt.

USDA will update its supply and demand forecast in a monthly report next week. The Brazilian government food supply agency Conab cut soy production in the second largest global soy producer and exporter behind the United States.

The U.S. winter wheat harvest was 20 percent complete as of Sunday, a record pace, USDA data showed.

The dollar .DXY was trading near the highest level since August 2010 against a basket of currencies, which has put a lid on U.S. grain exports in recent weeks.

(Additional reporting by Valerie Parent and Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Marguerita Choy and Jim Marshall)

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