Wheat jumps 1% on USDA crop condition report

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CANBERRA — U.S. wheat futures jumped 1% on Tuesday after the U.S. Department of Agriculture pegged the condition of crops below market expectations, stoking concerns about global supplies.

FUNDAMENTALS

* The most active wheat futures on the Chicago Board Of Trade were up 1% at $6.71 a bushel by 0213 GMT, having closed up 0.3% on Monday.

* The most active soybean futures were down 0.2% at $14.12 a bushel, having firmed 0.5% on Monday.

* The most active corn futures were up 0.2% at $6.60-3/4 a bushel, having closed down 0.6% in the previous session.

* Crop ratings for spring wheat, grown in the drought-hit northern U.S. Plains, declined sharply in the past week, ahead of weekend storms that offered some relief. The USDA said just 27% of the crop was in good-to-excellent shape, a 10-point drop that was well below expectations.

* The U.S. corn crop was rated to be 65% in good-to-excellent shape as of Sunday, down 3 percentage points from a week earlier and a point lower than the average estimate in a Reuters survey of 11 analysts ahead of the report.

* Soybeans were rated 60% good to excellent, in line with analyst expectations, but down 2 points from a week earlier. The USDA also said the U.S. soybean crop was 97% planted, on par with trade expectations.

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* Soybean futures also drew support from USDA confirmation on Monday of renewed buying by China, first reported by Reuters on Friday, the country’s largest scale purchases in 4-1/2 months.

MARKET NEWS

* The dollar paused for breath on Tuesday as traders looked to a testimony from U.S. Federal Reserve chair Jerome Powell for guidance after a surprise shift in the central bank’s policy outlook, while cyptocurrencies nursed heavy losses.

* Crude dropped on Tuesday as investors cashed in on a recent rally, but market sentiment remained solid on hopes for a quick recovery in oil demand in the U.S. and European markets and fading expectations for an early return of Iranian crude.

* Wall Street rallied on Monday, with the Dow completing its strongest session in over three months as investors piled back in to energy and other sectors expected to outperform as the economy rebounds from the pandemic.

(Reporting by Colin Packham; Editing by Amy Caren Daniel)