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Grains slide further Thursday

Jeff Caldwell 12/29/2011 @ 11:46am Multimedia Editor for Agriculture.com and Successful Farming magazine.

A mixed start has turned one direction Thursday at mid-day, as soybeans lead corn and wheat lower.

March corn's 4 3/4 cents lower at $6.37 3/4 per bushel, while March wheat's 4 cents lower at $6.47 1/4 and January soybeans are 10 1/4 cents lower at $11.88, according to Barchart.com.

Thursday's losses come on profit-taking and trader positioning after sharp gains earlier in the week. Add to that a stronger U.S. Dollar index, and take away weekly grain export numbers that won't be released until Friday morning, and it's a bearish combination for all pits.

On the South American weather front -- the factor that's had the greatest influence on the grains the last 2 weeks -- some rain has fallen over the last 24 hours, but it hasn't knocked down the drought stress that's hitting many acres in Argentina and southern Brazil.

"Crops that received rain last week will be seeing increasing rainfall during the coming week while crops that did not receive much rain last week will suffer the greatest potential production damage," Jim Bower of Bower Trading, Inc., said in a customer newsletter Thursday morning. "Southern Brazil crop conditions will have opportunity for some needed rain offering an opportunity for crops to continue getting by on limited soil moisture."

Though that stressful weather situation has taken much of the spotlight most recently, the Eurozone debt crisis isn't far from the surface, and Bower says that could bubble up and take more focus from the trade. And, it will be a bearish focus, he says.

"European banks continue to 'park' huge amounts of money into the European Central Bank, which is worrisome because it means they are not making loans to each other and without fresh investment, the growth rates in Europe will likely remain sub-par," Bower said Thursday. "The above scenario in turn means that Europe simply has not found a solution to its sovereign debt crisis and 'cosmetic' solutions will not work."

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Weather Trumps Demand