Chicago Board of Trade soyabean futures fell for the fifth day in a row on Monday, sliding to a one-month low on concerns about a bailout plan for eurozone member Cyprus and on availability of a large South American soyabean harvest. Wheat turned down for the first time in seven trading sessions and corn turned firm in a modest rebound after slipping earlier for the third consecutive session on risk aversion that boosted the dollar while weakening commodities and equities.
"The weak crude oil and strong dollar is leading to safe haven investing and liquidation in grains," said Mike Zuzolo, analyst for Global Commodity Analytics. Eurozone finance ministers want savers in Cyprus to forfeit a portion of their deposits in return for a 10 billion euro ($13 billion) bailout for the island, which has been financially crippled by its exposure to neighbouring Greece. The White House is monitoring Cyprus' plans, a White House spokesman said on Monday, but declined to comment further on the plan, which has rattled financial and commodities markets.
The decision, announced on Saturday morning, stunned Cypriots and caused a run on cash points, and led to fears of knock-on panic in other fragile euro-zone economies. "The agricultural markets are feeling the heat because of risk aversion," said Joyce Liu, investment analyst at Phillip Futures in Singapore. "It was quite surprising to see the bank levy on Cyprus and there is fear that this might spread to other nations in the euro zone."
Chicago Board of Trade most-active May soyabeans were down 16-1/2 cents per bushel at $14.09-1/2. May wheat was down 10-1/4 at $7.12-3/4 and May corn was up 3 at $7.20 a bushel. European wheat held up better, supported by weakness in the euro, with May milling wheat in Paris trading steady at 234.75 euros per tonne. The nervousness over Cyprus added to bearish soyabean fundamentals in the shape of all-time high Brazilian production and declining demand in the United States. Last week, premiums over Chicago futures prices paid for soyabeans at Brazil's Paranagua port turned negative for the first time in the 2012/13 crop year as the record harvest pressured prices.
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