US corn, soybeans fall,China demand supports wheat

August 12, 2013

July 13, 2013 Reuters via Business Recorder

HAMBURG: Chicago soybean and corn prices fell on renewed selling pressure on Wednesday following sharp rises this week in turn caused by fears that hot and dry weather in the US grain belt could damage crops.

Wheat rose from a one-week low, helped by expectations of strong imports by China following weather damage to China's harvest.

"Soybeans and corn are suffering some selling pressure today following their rises this week," said Arnaud Saulais of SCB. "The talk about more Chinese demand is helping to support wheat prices."

Chicago Board of Trade new-crop December corn was down 0.2 percent to $5.09-3/4 a bushel by 1105 GMT. November soybeans fell 0.27 percent to $12.83 a bushel.

September wheat rose 0.3 percent to $6.71-3/4 a bushel.

Both corn and soybeans have been underpinned this week by fears the hot weather in the US Midwest will stress pollinating corn and the growing soybean crops.

"Soybeans had risen sharply on Tuesday and erased part of last week's weakness but the November soybean contract failed to cross the $13 level," Saulais said. "This has led to some profit-taking and selling pressure."

Grains and soybeans are currently very volatile weather markets with prices very sensitive to forecasts each day in the US grain belts, he said.

"Overall my customers have the feeling the situation with the US corn crop is not very bad compared to the crisis last year and we are seeing some weakness some days because of such sentiment," he said.

US corn was planted late because of excessive wet weather and will be pollinating or going through its reproductive stage of development later than usual.

Importers are hoping record US corn and soybean crops this year will ease three years of tight supplies. US corn prices hit record highs last year following a devastating drought.

The market is also factoring in a surprise drop in US condition ratings for each crop.

The US Department of Agriculture (USDA) this week rated 66 percent of the US corn crop in good to excellent condition, down from 68 percent a week earlier. For soybeans, 65 percent of the crop was rated good or excellent, down from 67 percent the previous week.

"This week's drop in crop conditions took the market by surprise with a 2 percent drop versus the normal mid-July drop of 1 percent," said Chris Narayanan of Societe Generale in a note. "While the market is rightly concerned with these outlooks, we see no serious threats yet to the US crop prospects and recommend selling any rallies."

In the wheat market, there is support from higher corn prices and hopes of Chinese demand although gains were capped by ample supplies from the freshly harvested US winter crop.

China's wheat crop has suffered more severely than previously thought from frost and rain, and import demand to compensate for the damage could see the country take over from Egypt as the world's top wheat buyer.

"On wheat, we know the Chinese are buying and there are forecasts of large volumes," said SCB's Saulais. But the expectations are already high following the USDA and other forecasts."

"We do not know the overall likely wheat imports by China but the demand from China is underpinning wheat prices."

Copyright Reuters, 2013

Facebook Twitter DZone It! Digg It! StumbleUpon Technorati NewsVine Reddit Blinklist Add diigo bookmark



Click to view


 19/03/2019 14:14:12
SCB Wins 6 Awards 2019

 19/08/2018 11:15:00
SCB Wins at the Energy Risk Awards

 23/11/2017 10:35:04
Russia Says Grain Supplies Not Affected by Radiation Release

 03/11/2017 15:45:11
SCB Group qualifies as a finalist for Best Risk Solutions Provider in the first Global Grain Awards

 23/08/2017 16:14:49
CME Group Announces First Trades of New Australian Wheat FOB (Platts) Futures

 22/08/2017 15:59:04
National Biodiesel Board Welcomes New Membership of SCB Brokers

 20/04/2017 19:29:41
SCB joins ePURE as Associate Member

 19/03/2017 17:51:19
How To Feed A Warming World ? – Kevin McGeeney, CEO of SCB Group at TEDxLausanne

 15/03/2017 00:44:02
First Black Sea wheat swap traded against the S&P Global Platts Black Sea Wheat price assessment

 21/02/2017 19:26:35
Bolstering the biofuels market Sponsored Q&A: Energy Risk Commodity Rankings 2017 | SCB

 16/02/2017 18:27:36
New industry partnership honors student energy research

 14/11/2016 09:00:00
SCB arranges landmark transaction in the Oregon Clean Fuels Program

 25/10/2016 18:00:00

 20/04/2015 11:27:30
EU biofuels industry needs to pivot to achieve wider success: SCB CEO

 03/03/2015 10:10:55
Wheat Climbs to One-Week High on Concerns of Cold Weather Damage

 03/02/2014 10:06:32
EU wheat falls on Egypt move to tighten purchase standards

 13/01/2014 12:20:35
EU wheat slips to 3-month low ahead of USDA data - RTRS

 06/01/2014 08:24:03
EU wheat markets little changed, weaker euro supports

 06/01/2014 07:18:54
GRAINS - Argentine rains dampen corn and soy markets

 27/09/2013 07:11:45
Paris Wheat Seen Falling on Fibonacci Breach: Technical Analysis

1     2     >>