Chicago Board of Trade wheat futures rose on Tuesday after the U.S. Department of Agriculture lowered condition ratings for the nation's drought-hit crop to a 30-year low.
Extreme dryness has ravaged crops in the U.S. Plains, where farmers grow hard red winter wheat used to make bread. USDA rated 27% of the nation's winter wheat in good-to-excellent condition as of Sunday in a report issued after trading ended on Monday. That was down 1 percentage point from a week earlier and the lowest for this time of year since 1996.
"That's obviously supportive and a reminder the crop is bad," said Randy Place, analyst for the Hightower Report.
CBOT July soft red winter wheat finished 2-3/4 cents higher at $6.67-1/4 per bushel.
Fund selling limited gains in grain and soy futures after the markets rallied on Monday on hopes of increased Chinese demand for American farm goods. Traders said on Tuesday that they were looking for more details on potential Chinese purchases. The White House said over the weekend that China, the world's biggest soybean importer, committed to buying at least $17 billion of U.S. agricultural products in 2026, 2027 and 2028, following President Donald Trump's visit to Beijing last week. The pledge would take China's total U.S. farm imports to around $28 billion to $30 billion a year, traders and analysts said, below a peak of $38 billion in 2022 but sharply above $8 billion last year and $24 billion in 2024. China's commerce ministry said over the weekend that Beijing and Washington agreed to expand agricultural trade through tariff reductions and tackle non-tariff barriers and market access issues.
"Although U.S. farm exports to China still face an additional 10% levy, market watchers are optimistic about the purchase agreement and expect the Chinese government to lift the levy soon," said a Beijing-based analyst who asked not to be named.
After rising earlier in the session, CBOT July soybean futures ended down 3-1/2 cents at $12.09-1/2 per bushel and July corn closed 1-3/4 cents lower at $4.75-1/4 per bushel.
