US new-crop December corn fell 2 percent to a one-week low on Wednesday on forecasts for more rain in the Midwest, which eased concerns about the heat-stressed crop as it heads into its critical pollination stage. However, old-crop spot July rose over 1 percent on a strong cash basis market due to brisk demand from ethanol makers and slow farmer selling.
In less than two weeks, the actively traded July/December spread has gapped nearly 150 percent to 82 cents, premium July from 33 cents, premium July at the end of May. "They were bull-spreading (buying July and selling December), the cash market is really hot," a trader said.
US soyabean futures fell nearly 2 percent, posting the biggest loss in over a week, as funds liquidated long holdings as concerns about the global economy weighed, despite a half percentage point drop in the dollar index. "Macroeconomic nervousness has a grip on the markets right now, that and there have been no big changes in the weather forecasts to feed the bull," said Sterling Smith, oilseeds analyst for Citigroup.
December corn, the first month to fully reflect this year's harvest, has tumbled nearly 6 percent in the past three days. Traders and analysts said there was increased concern about the global economy. European stocks were pressured by borrowing costs in Italy and Spain.
Slower-than-expected economic expansion in China, the world's largest importer of soyabeans, lent further pressure to the soya market. Wheat held firm, underpinned by a technical bounce after Wednesday's 2 percent tumble and on a cut in Australia's wheat harvest forecast. Australia is expected to be the world's second largest exporter and a reduced crop there could shift business to the United States.
USDA pegged winter wheat output this year at 1.684 billion bushels, topping analysts' estimates. Top producer Kansas was expected to harvest 387 million bushels, well above last year's output of 276.5 million. Chicago Board of Trade new-crop corn for December delivery was down 12 cents at $5.10-1/2, spot July delivery was up 8-1/2 cents per bushel at $5.92-1/2. CBOT July soyabeans were down 26-3/4 cents at $14.08-1/4 and July wheat was unchanged at $6.16.
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