April 6, 2016 / 6:47 PM / 2 years ago

GRAINS-Wheat drops to near 1-week low as U.S. crop progresses

* Wheat dips on better U.S. crop development, precipitation

* Corn, soybeans gain; focus on planting (Adds closing U.S. prices, Informa estimates)

By Rod Nickel

WINNIPEG, April 6 (Reuters) - Chicago wheat fell on Wednesday to a nearly one-week low, pressured by a U.S. Department of Agriculture (USDA) report that revealed U.S. wheat was progressing faster than expected.

Corn rose to its highest in almost a week, following technical indicators. Soybeans gained on bargain-buying.

The Chicago Board of Trade’s most-active May wheat contract fell 11 cents, or 2.3 percent, to $4.63 a bushel. It touched $4.61-1/2, the contract’s lowest price since March 31.

The USDA on Tuesday rated 59 percent of U.S. winter wheat as in good to excellent condition. That was above analysts’ estimates for 57.6 percent of plants for summer 2016 harvesting, and the five-year average of 42 percent.

“There is really just no reason to buy (wheat),” said Karl Setzer, analyst at MaxYield Cooperative, adding that the favorable ratings weighed on prices. “You throw in better chances of precipitation for the wheat belt in the United States, and we just see the money come back out again.”

The crop’s progress contrasts with concerns about dry, cold U.S. weather in recent weeks, which previously lifted prices, said Frank Rijkers, agrifood economist at ABN AMRO Bank.

Supplies are also ample in other countries, Rijkers said.

“There is a lot of wheat in the world and only moderate demand.”

Most active May corn rose 1-1/4 cents, or 0.4 percent, to $3.58 a bushel, reaching its highest level since March 31. May soybeans reversed losses to climb 3-1/4 cents, or 0.4 percent, to $9.08 a bushel.

Both crops are likely to trade sideways for the next few weeks until U.S. spring planting season advances, Setzer said.

“Corn is seeing support from expectations U.S. farmers could plant less corn than forecast, turning instead to soybeans because of rainy weather during the U.S. sowing period,” Rijkers said. “There is also support coming from belief that Brazil’s corn exports will slow down and the country could even import corn after the surge in Brazil’s corn exports at the start of this season.”

Argentine soybean harvesting in main production regions was halted by rain last weekend, and rain this week is expected to cause further delays.

Even so, Informa Economics, the private analytics firm, on Wednesday raised its estimates of 2015/16 corn and soybean production in Argentina while lowering its estimate of Brazil’s soybean crop, trade sources said. (Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Jason Neely, Tom Brown and Jonathan Oatis)

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