SINGAPORE: Chicago wheat lost more ground on Tuesday, with prices dropping to their lowest in almost two years on forecasts of much-needed rains in US winter grain regions where crops have deteriorated amid a severe drought.

Corn edged lower as China cancelled some purchases of US supplies, while soybeans eased.

“US hard red winter wheat areas will get the needed rain this week,” said Terry Reilly, a senior analyst at Futures International.

“Most areas will get rain by Thursday with Tuesday and Wednesday the wettest.”

The most-active wheat contract on the Chicago Board of Trade (CBOT) slid 0.6% to $6.53-1/4 a bushel, as of 0435 GMT, after hitting its lowest since July 2021 at $6.53 a bushel.

Corn fell half a cent to $6.07-1/4 a bushel and soybeans also slid half of a cent to $14.35-1/2 a bushel.

Export prices of Russian wheat continued to decline last week as low demand outweighed the impact on the market on uncertainty over whether the Black Sea grain deal will be extended, analysts said.

Prices for Russian wheat with 12.5% protein content, delivered free on board (FOB) from Black Sea ports, were $265 a tonne, down $6 from last week, the IKAR agriculture consultancy said.

The US Department of Agriculture on Monday rated 26% of US winter wheat in good to excellent condition, the lowest for this time of year since 1989, due to prolonged drought.

The wheat ratings, which reflected dry and windy conditions in key portions of the Plains wheat belt, were down 1 percentage point from a week ago and matched the average expectation among 11 analysts polled by Reuters.

The head of the Russian Grain Union said on Monday the Black Sea grain deal to facilitate Ukrainian agricultural exports had not yielded anything positive for Russia or helped facilitate supplies to the global market.

In the corn market, pressure stemmed from China’s cancellation of some US cargoes. Private exporters reported that Chinese buyers cancelled purchases totalling 327,000 tonnes of corn, the US Department of Agriculture (USDA) said on Monday morning.

In a separate report the USDA said that weekly corn export inspections totalled 913,813 tonnes. That was down from 1.237 million tonnes a week earlier.

A union of Argentine transporters started an indefinite strike on Monday, threatening to hit shipments at the Rosario agro-port hub by forcing exporters to rely on dwindling grain reserves at the terminals, according to local bodies.

Commodity funds were net sellers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Monday, traders said.