PARIS/SINGAPORE, May 21 (Reuters): Chicago wheat futures eased on Tuesday after climbing almost 6 per cent in the previous session, although lower US winter crop ratings and frost damage in Russia are likely to limit losses.
Soybeans and corn fell amid a rapidly advancing US harvest.
"The wheat market has been driven by a continued deterioration of Russian crop prospects, with more downgrades likely to come in the next couple of weeks," Commonwealth Bank analyst Dennis Voznesenski wrote in a report.
Crop damage from May frosts and dry weather in Russia have led to further cuts in forecasts for this year's harvest and exports.
IKAR agricultural consultancy on Tuesday cut its Russian wheat crop forecast to 83.5 million metric tons from 86 million tons and cut the projection for 2024/25 Russian wheat exports to 45 million tons from 47 million tons.
However, reassuring news came from Ukraine where a state weather forecaster said on Tuesday recent frosts in the east, north and centre of Ukraine had not caused significant damage to grain and oilseed crops.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.4 per cent at $6.85-3/4 a bushel, as of 1030 GMT. Soybeans lost 0.9 per cent to 12.35-1/2 a bushel and corn dropped 1 per cent to $4.56 a bushel.
"Excessive humidity over the next few days in Western Europe and the United States is also being monitored by operators. Meanwhile, in Australia, overly dry conditions are expected to continue in the west and south of the country, threatening canola sowings above all," French consultancy Agritel said in a note.
Dry weather in western and southern parts of Australia is threatening to shrink crops, with canola output likely to drop this year, but ample rainfall in eastern states is expected to boost overall wheat output, analysts said.
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