Wheat futures led losses Monday as improving weather forecasts prompted a selloff in the grain and soybean market.
Rainfall over the weekend in the parched northern Plains eased concerns about the stressed wheat crop there. That, and a higher U.S. Department of Agriculture wheat production forecast for this year, had traders betting on another large American grain harvest, reversing course from last week.
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"Unless a strong export program develops unexpectedly," said Dave Marshall, a farm-marketing adviser at brokerage First Choice Commodities in Nashville, Ill., "we're going to have plentiful supply going forward."
July-dated Chicago soft-red wheat futures, used mostly in lower-quality baking, fell 2.6% to $4.34 a bushel on Monday at the Chicago Board of Trade. The higher-end Minneapolis hard red spring wheat futures, grown in drought-affected states like the Dakotas, also fell but remained at a premium to other grain types. July contracts dropped 1% to $6.00 1/2 a bushel at the Minneapolis Grain Exchange.
Meanwhile, traders bet that wetter forecasts in the Midwest were likely to mitigate heat stress on corn and soybean crops after a scorching hot weekend. Showers in the next six to 15 days should aid crop growth, according to MDA Weather Services.
But market participants will be looking to Monday afternoon's government crop progress report to see the toll recent dry spells have had on crops until now. Analysts expect the proportion of the corn and spring wheat rated in good or excellent condition to decline from last week.
CBOT July corn futures fell 2.7% to $3.77 1/4 a bushel while soybeans dropped 1.1% to $9.31 1/4.
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(END) Dow Jones Newswires
June 12, 2017 15:45 ET (19:45 GMT)