CHICAGO, June 3 (Xinhua) -- Chicago Board of Trade (CBOT) grains futures closed lower over the trade week, with wheat futures dropping nearly 2 percent.
CBOT July corn futures ended unchanged as lower than expected National Agricultural Statistics Service crop conditions fought against improving Central U.S. weather.
Good or excellent ratings in the Eastern Corn Belt are down some 14-26 percent from last year, and current models suggest yield no better than trend in the U.S. states of Illinois, Indiana, Oklahoma and Michigan.
It's far too early to really correlate conditions and yield, but the trade is beginning to consider a 2017 U.S. corn yield of 166-168 bushels per acre. Dryness is now forecast to extend into the latter part of June, which needs to be closely monitored.
Coming South American corn exports will weigh on U.S. corn exports, but rising cash wheat prices and competitive Gulf corn basis will offer support. The market's focus for the next six to eight weeks will be totally focused on weather and U.S. corn yield.
As for CBOT wheat futures, winter wheat prices underwent a continuous decline.
Abnormal dryness and moderate drought conditions have expanded across the Dakotas, with little relief scheduled for the next 10 days, while similar concerns are noted in Ukraine and pockets of Central Europe.
All is not well with new crop wheat growing conditions, and world cash markets reflect this.
Spot Russian fob offers have rallied to a 15-week high and French wheat maintains a premium to comparable U.S. supply. The point is that this is no place to turn bearish, and hi-pro wheat's premium to lesser quality will widen further if Northern Hemisphere weather patterns don't change.
Unlike recent summers, the U.S. just might maintain its recently found share of world trade, and a post-harvest recovery of 40-70 cents is likely.
Soybeans fell to new lows in follow through technical trading early in the week, but had recovered a good portion of those losses by Friday' s close. Solid export demand along with building weather concern supported the late week recovery.
About 67 percent of the U.S. soybean crop was planted through last week, and heady gains are expected to have been scored across the Midwest. It's the eastern states of Indiana and Oklahoma that saw the most rain through the week and are expected to be slightly behind average.
Nationally, analysts maintain that 84-87 percent of the U.S. soy crop is expected to be in the ground through Sunday. Initial soy crop ratings are not expected for at least another week, but reports from the field suggest that ratings will be down from a year ago.
With U.S. planting winding down and crops emerging, weather take on increasing importance.
About 14 percent of the estimated U.S. soy crop is planted in the Northern Plains where drought conditions look to worsen. A 20 percent yield reduction would drop 2017/18 marketing year's U.S. soy stocks by 80-100 million bushels.
