U.S. wheat futures are expected to open steady to slightly higher Tuesday on persistent worries about domestic and global crops, along with support from corn futures.
In overnight trade, soft red winter wheat for July delivery at the Chicago Board of Trade was up one cent to $7.37 1/2 per bushel, while deferred contracts were lower. Hard red spring wheat at the Minneapolis Grain Exchange was up 3/4 cent to $9.11 per bushel.
The market is underpinned by crop concerns from Texas to Europe. The worries were bolstered by Monday's weekly crop progress report from the U.S. Department of Agriculture, which showed the condition of the U.S. winter wheat crop continues to deteriorate because of drought.
The USDA showed that 32% of the crop was rated good to excellent, down one percentage point from a week ago and well below last year's rating of 66%.
"Today's market should be a battle between declining crop scores and ideas that a wetter pattern will stabilize yield prospects in the central and southern Plains, although it's too late for most fields from southern Kansas south to Texas," Farm Futures said in a morning commentary.
Some analysts say wetter weather in the central and southern Plains will be of little use at this point, but that it is nonetheless limiting the market's upside for now.
"Until we get these early Texas yields in, is anyone really going to believe this stuff is gone?" said Jerry Gidel, analyst with North America Risk Management Services.
Meanwhile, the crop in the northern U.S. Plains is struggling due to excess rains. The USDA said the spring wheat crop in North Dakota, the nation's largest producer, was only 15% planted as of Sunday, versus the average of 68%.
"Is North Dakota ever going to start?" Gidel said.
Higher corn futures are expected to underpin wheat prices Tuesday. But Gidel said the wheat market is facing technical pressure, as several key moving averages loom above the market.
Overseas, EU wheat futures were under mild pressure as the market took a breather from recent gains, but worries about drought persist.