CBOT corn and soy futures hit six-week low amid Euro woes

Corn and soy futures in CBOT both fell on Wednesday (May 19), as German trading limits triggered a sell-off in the commodities markets.

Soy futures for July delivery was down 1.0 cent to settle at US$9.385 per bushel. The price once reached US$9.3575, the lowest for the most-active contract since April 6. July corn retreated 0.5 cents to US$3.5925 a bushel, once hitting US$3.535 per bushel, the lowest level for a most- active contract since April 27. July wheat rose 1.5 cents to US$4.6925 a bushel.

Germany's financial regulators announced late Tuesday that they will ban short selling on some European bank shares and euro zone government bonds to support the financial stability of the euro zone.

The euro rebounded against the dollar after hitting a four-year low on Wednesday, but the increasing uncertainty over market regulation in the euro zone has fuelled investor worries and triggered a sell-off of risky assets like commodities futures and stocks.

Corn futures started the day higher, but rapidly pared earlier gains and remained negative for most of the session, pressured by the near-perfect weather outlook which may start from the weekend and last more than 10 days. The fact that crude oil price hit a seven-month low on Wednesday has also offset the positive effect of a lower dollar on corn and soy prices.

Meanwhile, the sharp break in dollar has provided major support for wheat futures by increasing its attractiveness in the global markets. A short-covering rally late in the session pushed wheat price higher. Wheat also posted gains versus corn amid light trade by spreaders, but the decline in corn and soybean prices have kept a lid on wheat price.