May 25, 2010
CBOT corn, wheat and soy futures decline as US dollar advances
Corn, wheat and soy futures declined after the seizure of a Spanish bank stoked investor concern that Europe's debt crisis may hurt the global recovery, strengthening the dollar and making US crop supplies more expensive.
Corn for July delivery fell for the first time in four sessions, dropping 1% to US$3.6725 a bushel at 10:38 a.m. in Singapore. Wheat declined 0.8% to US$4.6375 a bushel and soy lost 0.2% to $9.39 a bushel.
The dollar gained for a second day against a basket of six major currencies after Spain's central bank seized CajaSur, a savings bank in Cordoba that refused a merger plan. The International Monetary Fund urged Spain to do more overhaul ailing banks, spurring concern that financial institutions in the euro area face further losses.
"We've seen risk aversion and US grains have come under pressure," Jonathan Barratt, managing director at Commodity Broking Services Pty. in Sydney said. "As a result of that, the bullish tone that we've had has taken a back seat."
Corn futures gained 4.2% in the five trading sessions to yesterday (May 24) on speculation that imports by China, the second-largest consumer, may surge this year after drought cut last year's output and snow delayed this year's planting. The nation is forecast by the USDA to consume 19% of global corn output.