By Tom Polansek
CHICAGO — U.S. wheat futures advanced on Tuesday on concerns about reduced supplies from Ukraine, a major exporter, while new-crop soybeans slipped as a widely watched crop tour projected bumper U.S. harvests.
Traders focused on Ukraine, expected to be the world’s second-largest grain exporter in the 2014/15 marketing year, as a spokesman for the prime minister said the country will lose 15 percent of its grain crop in two violence-hit regions.
Concerns that Ukraine may possibly scale back exports helped fuel gains, said Jerry Gidel, chief feed grain analyst for Rice Dairy in Chicago.
“In reality there’s probably not going to be any long-term halt of exports,” he said.
Chicago Board of Trade December wheat rose 0.8 percent to $5.58-1/2 a bushel after closing down 1.6 percent on Monday, when worries about the conflict between Ukraine and Russia temporarily eased.
December corn rose 0.2 percent to $3.72-1/4 a bushel, adding to a decline of 1.5 percent in the previous session.
November soybeans lost 0.5 percent to $10.52-3/4 a bushel on good U.S. crop conditions and projections for large U.S. harvests from a private crop tour.
On Monday, the USDA rated the condition of U.S. soybean crops as 71 percent good-to-excellent, up from 70 percent a week earlier. Corn and soybean fi elds northwest of Indianapolis consistently showed robust yield potential on Tuesday, with rains this week likely to enhance already bin-busting prospects for the crops, participants on the Pro Farmer Midwest Crop Tour found.
During the next two days, the tour will likely discover even bigger harvest potential in top-producing states like Iowa and Illinois, said Rich Nelson, chief market strategist for brokerage Allendale in McHenry, Ill.
“There’s a growing realization that as they move toward Illinois and Iowa, that this is going to be the real bearish issue,” he said.
Traders paid close attention to the tour amid expectations the U.S. Department of Agriculture will increase its yield estimates in the coming months.
On Monday, the tour estimated South Dakota’s corn yield at 152.71 bushels per acre, below the 161.75 bushels estimated by the tour last year, but above its three-year average of 125.7 bushels.
The USDA last week estimated the state’s yield at 139 bushels.
“The crop is coming in just looking peachy, according to the tour,” said Jack Scoville, vice president for brokerage Price Futures Group in Chicago.
The tour was scheduled to release yield forecasts for Indiana and Nebraska on Tuesday. Pro Farmer’s editors will release their estimates of total U.S. crop production on Friday.