Corn falls again
CHICAGO (Dow Jones)--U.S. grain futures slumped Wednesday, as the condition of the U.S. corn crop improved and the dollar strengthened.
The heaviest losses came in the thinly traded, front-month July corn contract, which is not subject to the daily, 30-cent limit on losses because it expires next week. The contract sank 31 3/4 cents, or 4.7%, to $6.48 3/4 a bushel as market participants liquidated positions. Corn for December delivery, the most actively traded contract, slipped 4 cents, or 0.7%, to $6.08 1/2 a bushel. Wheat futures also weakened, while soybean futures finished little changed at the Chicago Board of Trade.
The firm dollar weighed on grain prices because it makes U.S. farm goods less attractive to foreign buyers, traders said. Corn struggled to advance even though the U.S. Department of Agriculture confirmed a steep decline in prices last week attracted fresh demand from Egypt and South Korea.
"The fact that we've seen some demand show up, especially on the export market, has helped stabilize the market a little bit," said Marty Foreman, analyst at Doane Advisory Services, an agricultural advisory firm in St. Louis.
The USDA said exporters struck deals to sell 120,000 metric tons of last year's corn crop to Egypt and 225,000 metric tons of the upcoming crop to South Korea. Yet grain traders were still waiting for confirmation of sales to China amid talk the country recently bought 500,000 metric tons.
In other news, the USDA's weekly crop progress report, issued after the markets closed Tuesday, indicated 69% of the corn crop was in good-to-excellent condition, up one percentage point from a week ago. The report was in line with the expectation of analysts, yet improvements in the excellent category surprised some traders.
Weather in the Midwestern Corn Belt continues to look mostly favorable for the developing crop, which will be harvested in the autumn, Foreman said. Traders are keeping an eye on forecasts for signs that conditions may turn too hot, which can stress the crop and reduce output.
"It's too soon to raise too many caution flags at this stage," Foreman said.
Soft red winter wheat for September delivery lost 8 1/2 cents, or 1.3%, to $6.27 a bushel. Soybeans for November delivery rose 1/2 cent, or 0.04%, to $13.18 1/2 a bushel.
December soymeal closed up 0.7% at $343.20 per short ton, while December soyoil gained 0.3% to 56.39 cents a pound. September ethanol edged up 0.08% to $2.456 per gallon, and September oats lost 1.3% to $3.42 1/2 a bushel. September rice jumped 1.8% to $15.57 per hundredweight.
At the Kansas City Board of Trade, hard red winter wheat for September delivery shed 1.3% to $7.26 1/2 a bushel. Hard red spring wheat for September delivery dropped 0.7% to $8.27 1/2 a bushel.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; firstname.lastname@example.org
(END) Dow Jones Newswires
July 06, 2011 15:55 ET (19:55 GMT)