China Agriculture View

US wheat futures slipped on Tuesday, extending losses to near a one-week low as investors booked profits after last week’s strong rally on a steady US dollar.

Soybeans and corn edged higher after losses in the previous session on prospects of better harvest weather next week.

“We have seen the dollar claw back some ground and that is in conjunction with a negative turn in macroeconomic sentiment,” said Toby Hassall, an analyst with Commodity Warrants Australia.

“We had such a significant move in wheat last week, really there wasn’t a huge degree of fundamentals behind that rally in terms of global demand and supply.”

Wheat surged last week to a four-month high, propelled by fund buying and rains that delayed sowing of the US winter wheat crop. Corn and soybean also rallied as wet weather slowed the harvest of this year’s big crops.

But forecasts of favourable weather and a strengthening dollar knocked down the grain markets on Monday, with corn dropping 5 per cent, wheat losing 3.8 per cent and soybeans 1.9 per cent.

The US Agriculture Department said that soybean harvest was 44 per cent complete as of October 25, well below the five-year average for late October of 80 per cent. Corn harvest was 20 per cent complete compared with the five-year average of 58 per cent.

Traders had been expecting the USDA report to show that soybean harvest was 50 to 55 per cent complete and corn harvest was 20 to 25 per cent complete.

“If we do start to see a favourable outlook for harvest than that harvest delay risk premium is going to be wiped out,” said Hassall.