Grains fell on Wednesday in choppy trade, with concerns about the European debt crisis spreading and a strong dollar keeping a cautious tone in the market. Wheat was the most volatile, tumbling 2.5 percent and abandoning earlier gains as some investors booked profits.
Renewed concerns about the eurozone debt crisis dampened investors' appetite for equities and grains after European Central Bank buying of regional sovereign debt failed to stem a bond sell-off. The uncertainty also nudged the dollar higher, making US-priced commodities less competitive.
"There's kind of a vacuum of new (fundamental) information right now," said Brian Basting, commodity research analyst at Advance Trading in Bloomington, Illinois. "In the absence of news, it's time to be conservative and move to the sidelines." Grains had notched strong advances a day earlier, snapping four-day skids for wheat and corn, as weakened prices attracted buyers. Chicago Board of Trade December wheat fell 16 cents or 2.5 percent to $6.16-3/4 a bushel.
World wheat supplies have been edging higher and on Wednesday French analyst Strategie Grains estimated the European Union's soft wheat harvest would rise nearly 5 percent in 2012. January soyabeans tumbled 12-1/2 cents or 1 percent to $11.87-3/4 a bushel, on long liquidation and the firm US dollar, traders said. Soyabeans snapped a three-day rally that was supported by talk that China was buying US soyabeans.
CBOT December corn lost 2-3/4 cents or 0.4 percent to $6.42-3/4 a bushel. Corn has been mired in a tight range for the past month and is up only slightly for the year. Even so, Japan bought about 800,000 tonnes of corn from Ukraine to diversify suppliers as high Chicago prices overwhelmed its usual preference for US corn. The seasonal lack of fundamental news for grains in the final weeks of 2011 may leave them trading sideways, said Arlan Suderman, market analyst at Farm Futures magazine.
"Farmers ask me, 'when do you think we'll get that rally?'" he said. "I'm not overly optimistic it will be before the end of the year." World grain prices are unlikely to pick up until early in 2012, when fundamentals return to the spotlight, US analyst AgResource said on Wednesday.
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