US wheat futures fell to a 3-1/2 month low on Tuesday ahead of a monthly US Department of Agriculture report that analysts expect will show rising domestic wheat stocks. Corn futures fell on favorable crop weather in the US Midwest, but soybeans rose on expectations the USDA's June supply/demand report on Wednesday will show tightening old-crop soy inventories.
On the Chicago Board of Trade, July wheat settled down 11-1/4 cents at $6.01-1/4 per bushel after dipping to $5.99-1/4, the lowest spot price since February 28. Wheat sagged as traders positioned for USDA's report. Analysts surveyed by Reuters estimated on average that USDA would raise its forecast of US 2014/15 wheat ending stocks by 2.2 percent, to 552 million bushels, from 540 million in May, and raise its 2013/14 stocks forecast as well.
CBOT July wheat has fallen about 19 percent since early May on prospects for plentiful global wheat supplies and stiff export competition as the Northern Hemisphere readies for harvest. "We do have some isolated issues with the hard red winter crop in the US, but when you look at the global picture we do see stocks building in 2014/15," said Graydon Chong, senior grains analyst at Rabobank.
Corn was under pressure from good weather and continued concern about China halting imports of US distillers dried grains (DDGs), a corn byproduct used in feed. CBOT July corn ended down 5-1/2 cents at $4.45-1/2 a bushel after touching $4.44-3/4, a four-month low. "You've got funds still long, and you've got no threats of weather. And China decided not to take DDGs any more. You are being hit on all fronts right now," said Jim Gerlach of A/C Trading in Fowler, Indiana.
Soybeans bucked the weak trend. July soybeans settled up 5-1/2 cents at $14.62-1/2 per bushel on short-covering ahead of USDA's June supply/demand report. Some analysts expect USDA to lower its US 2013/14 soybean ending stocks forecast from its May figure of 130 million bushels, already a 10-year low. The average estimate among analysts surveyed by Reuters was 127 million bushels. "Soybeans are trading higher ... as some traders appear to be eyeing a friendly number tomorrow," said Brad Metzger, a vice president with Futures International in Chicago.
