US wheat led corn lower on Wednesday, weighed down by stiff export competition, a firmer dollar and nervousness over the eurozone economic crisis. Wheat ended sharply lower while corn losses were moderated by underlying technical support. Soyabean futures found strength to bounce back from early losses.
The bearish grain trade comes ahead of Friday's summit of European leaders aimed at resolving the European Union's debt problems. Comments from a senior German official contributed to the bearish sentiment as it became clear that Berlin is increasingly pessimistic that the summit will be able to solve the debt crisis. Weaker crude oil prices, flat and choppy trade in equities, and the firm dollar also pressured grain prices.
Oil was off more than a dollar with Brent crude below $110 a barrel due in part to doubts over the European debt summit. "We have a setback in the hopes for resolving the eurozone problems," said Dan Manternach, senior economist for Doane Advisory Services. Manternach said the wheat market was also reeling from a "hangover" after news that Australia was headed for a record wheat crop and that Canada's wheat crop in 2011 was bigger than forecast.
Chicago Board of Trade March wheat ended down 12-1/2 cents, or 2 percent, at $6.00-1/2 a bushel. Funds sold 3,000 wheat contracts. CBOT March corn closed down 3-3/4 cents, or 0.6 percent, at $5.92-3/4, below all key moving averages. Funds sold a net 5,000 corn contracts. CBOT January soyabeans ended up 1-1/2 cents at $11.31. Funds bought 3,000 soyabean contracts, according to floor traders.
Soyabean futures traded both sides of unchanged, underpinned by ideas that Chinese demand for US supplies could bump up in the face of forecasts for detrimentally dry weather in key soy production areas of South America. A forecasted dry spell was expected to stress South American corn and soyabean fields.
The US Agriculture Department is due to release a closely watched monthly crop production and supply report on Friday. Analysts surveyed by Reuters expect official estimates of US corn stocks to fall slightly and soy supply estimates to rise by nearly 10 percent.
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