GRAINS-Corn, soy, wheat fall on global growth worries
(New throughout, updates prices, market activity to close) * Corn retreats on risk aversion, global economy concern * Additional pressure from softening domestic, export demand * Worries about dry U.S. crop weather take a back seat * Soybeans, wheat follow corn lower By Julie Ingwersen CHICAGO, June 21 (Reuters) - U.S. corn, soy and wheat futures fell on Thursday as profit-taking and concerns about a slowdown in global economic growth overshadowed worries about dry weather threatening U.S. crop prospects. Grains and other commodities weakened after data showed Chinese, European and U.S. manufacturing activity slowing further and risk aversion swept across financial markets. Grains "would be up double-digits if it were not for the outside markets, specifically the crude oil market and this 'risk-off' mindset," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana. Business activity across the euro zone shrank in June for a fifth straight month, and Chinese manufacturing contracted, while weaker overseas demand slowed U.S. factory growth, surveys showed. The HSBC Flash Purchasing Managers Index, the earliest monthly indicator of China's industrial activity, fell to a seven-month low of 48.1 in June from 48.4 in May. "We've had several piece of economic news that would say we are slowing down. So the fund mindset right now is, 'why buy grains,' even though the weather says you should be buying them," Zuzolo said. At the Chicago Board of Trade, July corn fell 25-1/4 cents, or 4 percent, its biggest decline in a month, to settle at $5.86-1/2 per bushel. Most-active December ended down 16-1/2 cents at $5.50. July wheat ended down 2-1/4 cents at $6.61-3/4 per bushel. July soybeans fell 8 cents at $14.38-1/2 a bushel while new-crop November ended down 24-1/4 cents at $13.71-1/4. CORN DEMAND SOFTENING Along with the economic worries, nearby corn was pressured by softer cash markets. Two ethanol plants in Nebraska were temporarily idled in recent days due to poor profit margins, and on Thursday the spot basis bid for corn at Decatur, Illinois, a key processing site, fell sharply, reflecting slowing demand. As well, weekly corn export data fell below trade expectations. The U.S. Department of Agriculture reported export sales of U.S. corn in the latest week at 381,000 tonnes, including sales for the current and new marketing years. The figure fell below trade estimates for sales of 450,000 to 650,000 tonnes. Traders set aside worries about dry crop weather that supported the market this week, as temperatures cooled slightly and rain fell in parts of Illinois. However, an updated long-term forecast from the National Oceanic and Atmospheric Administration indicated above-normal temperatures across most of the Midwest through July. "We're in a weather market and it's bullish, but the outsides aren't helping at all right now," said Tom Uhlman, an independent local trader. SOYBEANS END LOWER BUT DEMAND UNDERPINS NEARBYS Soybeans followed the weak trend, but front-month July was underpinned by strength in soymeal after the USDA reported export sales of U.S. soymeal in the latest week at 282,000 tonnes, most of it for the 2011/12 marketing year, topping trade expectations for 50,000 to 150,000 tonnes. "The trade is probably estimating that we are going to continue to tighten on old-crop (soybean) supplies, but we have the potential for good new-crop supplies if we get rains," Zuzolo said. CBOT wheat fell on spillover pressure from corn and strength in the U.S. dollar, which makes U.S. grain less competitive on the world market. But losses were limited by fears that world wheat production this year might fall short of expectations. "There is a sense out there that global wheat production is falling," said Jim Gerlach, president of A/C Trading in Fowler, Indiana. But economic worries dragged down the thinly traded Minneapolis spring wheat market. Front-month July spring wheat settled 1/2 cent lower at $8.43-3/4 per bushel after surging in early trade to $8.76, a seven-month high on the continuous price chart. The spot July contract was supported by tight supplies of deliverable MGEX spring wheat due to a lack of farmer selling, traders said. As well, those holding short positions in MGEX July wheat struggled to exit the market ahead of options expiration on Friday and the start of the contract's delivery period next week. Prices at 3:56 p.m. CDT (2056 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 586.50 -25.25 -4.1% -9.3% CBOT soy 1438.50 -8.00 -0.6% 20.0% CBOT meal 429.00 1.60 0.4% 38.7% CBOT soyoil 49.81 -1.00 -2.0% -4.4% CBOT wheat 661.75 -2.25 -0.3% 1.4% CBOT rice 1433.50 -16.00 -1.1% -1.8% EU wheat 214.25 1.75 0.8% 5.8% US crude 78.16 -3.29 -4.0% -20.9% Dow Jones 12,574 -251 -2.0% 2.9% Gold 1566.05 -39.33 -2.4% 0.1% Euro/dollar 1.2541 -0.0162 -1.3% -3.1% Dollar Index 82.3410 0.7580 0.9% 2.7% Baltic Freight 978 6 0.6% -43.7% * CBOT prices in cents per bushel except for soymeal in dollars per ton, soyoil in cents per lb and rice in cents per hundredweight. Paris futures prices in euros per tonne. (Additional reporting by Sam Nelson in Chicago, Colin Packham in Sydney and Sybille de La Hamaide in Paris; Editing by Himani Sarkar, Jason Neely, Phil Berlowitz and David Gregorio)
- Tweet this
- Share this
- Digg this
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
Trending On Reuters
U.S. President Barack Obama ended a landmark day in India on Monday with a pledge of $4 billion in investments and loans, seeking to release what he called the "untapped potential" of a business and strategic partnership between the world's largest democracies. Full Article | Slideshow