US corn and soya futures inched down on Friday, after sharp gains the previous day, as financial markets sagged over worries the Federal Reserves Treasury bond purchase plan could have unintended consequences. Underlying sentiment for grains markets was bolstered by a weak dollar and renewed inflation worry, which make commodities more appealing to investors as a hedging tool.
The dollar was heading on Friday for its biggest weekly fall in 24 years as investors feared the Federal Reserves plans to buy longer-term government debt would cheapen the worlds reserve currency. "The weak dollar has increased attractiveness of grains and other commodities, but the market is taking a pause after a big gain on Thursday," said Yoo Tae-won, a trader at Samsung Futures.
May corn futures dropped 0.2 percent to $3.95-3/4 a bushel after rising to a seven-week high on Thursday, while the May soyabean contract shed 0.05 percent to $9.40 a bushel following Thursdays gain of 25-1/2 cents. Limiting the downside was rainfall in the corn-growing US Midwest expected on Sunday or Monday, which will slow spring fieldwork.
Soya was also well supported by supply concerns stemming from Argentina, as the worlds major grain exporter is locked in export tax disputes with farmers. Argentinas president unveiled a plan on Thursday to share soya export data revenue with provincial governments, which farmers called a poly to broaden support for a levy they despise.
Chicago Board of Trade May wheat futures edged up 0.3 percent to $5.57 a bushel, sustaining a 4.7 percent rally on Thursday. Capping the upside of wheat was rainfall forecast in US Plains HRW wheat region Sunday through Tuesday, although the heaviest rain was expected in the north and east, away from drier and bigger acreage areas.
World wheat stocks are set to recover this year thanks to a record crop but weather and uncertainty over demand in an ailing global economy could hit the size of any surplus next season, analysts said. Export sales of US corn, soya and wheat were all below estimates last week, USDA data showed.
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