Wheat falls for second day as market seeks direction from USDA report

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U.S. wheat fell for a second day on Tuesday, dropping 2.3 percent in the past two days, though market sentiment remained cautious with a widely-watched U.S. government report out later today that is expected to give more firm direction for prices.

Corn fell, extending its 1.5 percent drop in the previous session, while soybeans ticked higher. Chicago Board of Trade front-month wheat fell 0.32 percent to $4.67-1/2 a bushel after closing down nearly 2 percent in the previous session when prices hit a near three-week intra-day high of $4.81-1/2 a bushel.

Despite edging lower, traders remained on the sidelines, cautious of taking fresh positions ahead of a U.S. Department of Agriculture report that is expected to show the lowest U.S. winter wheat plantings since 2009. “Analysts expect only a modest decline but we think there is a risk of a more significant decline,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

Wheat prices dropped to a five-year low last week as projections from the USDA show that stockpiles will end the growing season at the end of June this year at a record 229.86 million tonnes. If the USDA report shows lower-than-expected winter wheat plantings in the U.S., that could help support prices in an overall bearish market. Adding pressure to wheat, updated weather models called for milder weather in the central and southern U.S.

Plains wheat belt later this week following a weekend cold snap. Wheat markets are also watching developments in Egypt, the world’s biggest wheat buyer, where payment delays and moves to tighten import rules have created uncertainty for exporters. Front-month corn fell 0.14 percent to $3.51-1/4 a bushel, after sliding 1.5 percent in the previous session. Corn is coming under pressure from today’s USDA report, which is expected to show that U.S. corn stocks as of Dec. 1 will be at a record high, according to a Reuters poll of traders.

Front-month soybeans rose 0.15 percent to $8.62-1/2 a bushel, having ended down 0.46 percent on Monday.

Corn and soybeans continued to brush off a USDA announcement on Monday that U.S. soybean export sales rose to 368,000 tonnes from the last report of 246,000 tonnes and corn sales rose to 152,400 tonnes from the last report of 115,000.

[reuters]

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