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GRAINS-Wheat drops 1 pct as macroeconomic concerns weigh
June 20, 2013 / 4:27 AM / 4 years ago

GRAINS-Wheat drops 1 pct as macroeconomic concerns weigh

* Market sentiment sours on U.S. Fed policy outlook, China
data
    * Weather factors underpin wheat and corn - analysts

    By Colin Packham
    SYDNEY, June 20 (Reuters) - U.S. wheat fell 1 percent on
Thursday after hitting a two-week high in the previous session,
amid a broad-based commodity sell-off and a firming dollar as
the U.S. Federal Reserve signalled a slowdown in the pace of
bond purchases.
    Market sentiment was dampened further after economic data
from China hinted at weakening of the world's second largest
economy. 
    Corn fell, having touched a two-week high on Wednesday,
while soybeans also slid.
    Chicago Board Of Trade July wheat slipped to $7.00-1/4
a bushel. It jumped 2.8 percent in the previous session, and hit
an intra-day peak of $7.10-3/4, on expectations for increased
domestic demand.
    "Wheat has fallen back today partly on a more benign weather
outlook and some correction from the solid overnight rally. But
the main impact today is from broader movements in the currency,
making life for U.S exporters even more uncompetitive," said
Garry Booth, manager of agricultural and commodity markets,
ICAP. 
    The dollar index edged slightly higher to hover near
a eight-day high, having jumped around 1 percent in the previous
session. Commodity currencies were among the hardest hit with
the Australian dollar slumping to a fresh 33-month
trough.
    December corn fell 0.96 percent to $5.65 a bushel
after rising 3.63 percent in the previous session.
    November soybeans fell 0.48 percent to $13.04-1/2 a
bushel, having firmed 1.63 percent on Wednesday. 
    
    WEATHER PROVIDES SUPPORT
    Federal Reserve Chairman Ben Bernanke said on Wednesday the
U.S. economy is expanding strongly enough for the central bank
to begin slowing the pace of its bond-buying stimulus later this
year. 
    The Fed bond-buying program has largely supported
commodities because it has lowered the value of the U.S. dollar,
making goods priced in dollars cheaper for other currencies. 
    Traders said weather factors provided a floor to the losses.
    Private analytics firm Informa Economics lowered its US
spring wheat planted area estimate by 5 percent because of
existing planting delays, pegging production at 11.791 million
acres, from 12.401 million previously. 
    New-crop corn remains underpinned by forecasts for hot, dry
weather in the coming weeks, analysts said. 
        
  Grains prices at  0325 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     700.25    -6.75  -0.95%    +2.90%     696.40   56
  CBOT corn      565.00    -5.50  -0.96%    +4.92%     553.13   60
  CBOT soy      1304.50    -6.25  -0.48%   -13.75%    1478.23   51
  CBOT rice      $16.22   -$0.06  -0.37%    -0.64%     $15.65   61
  WTI crude      $97.30   -$0.94  -0.96%    -1.16%     $95.37   60
  Currencies                                                
  Euro/dlr       $1.327  -$0.012  -0.93%    -0.73%
  USD/AUD         0.927   -0.022  -2.33%    -2.93%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential
 
 (Editing by Muralikumar Anantharaman)

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