US grain and soyabean futures slipped on Thursday as the rising US dollar made farm products less competitive on the global market. The United States is having a hard time competing for grain export business, with Ukraine and South America undercutting US corn prices, said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
Lower-priced corn available from rival exporters "is going to continue to be an ongoing problem for US producers, especially if the dollar continues to work higher," he added. On Friday, traders will digest weekly export sales data from the US Department of Agriculture, a day later than usual due to Monday's federal holiday. Chicago Board of Trade March corn unofficially ended down 3-3/4 cents at $3.84-1/4 a bushel, while March soyabeans dropped 5-3/4 cents to $9.77-3/4 a bushel.
Weakness in crude oil prices and expanding US ethanol inventories added pressure on corn prices, traders said, noting that weekly ethanol stocks rose 158,000 barrels to 20.4 million barrels. "The large inventories are becoming a problem," Pfitzenmaier said. Weekly US ethanol output also increased, according to the US Energy Information Administration. However, production is expected to trend lower in the coming months due to weakening margins, said Rich Nelson, chief strategist for brokerage Allendale.
In global corn production, the International Grains Council raised its 2014/15 world crop estimate to a record 992 million tonnes from 982 million. Forecasts for timely rains in Brazil, a major corn and soya producer, lifted crop expectations and weighed on prices, traders said. Soyabeans touched a three-month low of $9.72-1/4 a bushel earlier in the week on expectations of a record Brazilian crop, which would boost already ample global production and tempt top buyer China to turn from US to South American supplies. Argentina is expected to harvest 13.9 million tonnes of wheat in the 2014/15 season, the agriculture ministry said, raising its estimate from 13.2 million tonnes. March wheat futures dipped 3 cents to $5.33-3/4 a bushel.
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