May 31, 2010

 

 

US grains markets skidded to a lower close on Friday as the dollar rallied against the euro after a downgrade in Spain's credit sparked more fears of global economic woes.

 

Grain losses were led by declines in corn futures, which dropped nearly 4% to the lowest point since May 20. The downturn was also due in part to favourable conditions in the US Midwest that reinforced expectations of bountiful US row crops.

 

US soy prices closed down 1.4% and US wheat prices ended 2.1% lower.

 

The downturn came after the Fitch ratings agency downgraded Spain's credit rating. US stocks fell amid renewed concerns about eurozone debt issues.

 

"That generated the economic concerns once again that just immediately spilled over into our commodity markets," said Prudential analyst Shawn McCambridge. "That uncertainty is going to hang over this market for quite a while."

 

Corn prices on the CBOT led grain markets lower, ending with spot July at US$3.59, and off 4.3% for the month. July wheat fell below its 50-day moving average of US$3.67.

 

Profit-taking and disappointing export sales data issued Thursday by the USDA were factors favouring bears, as was nearly ideal growing weather in the US Midwest.

 

Still, corn saw some underpinning from Chinese import demand. The first cargo of US corn to be shipped to China in nearly four years was being loaded at the Pacific Northwest this week and could leave for China by this weekend, grain industry sources said on Thursday.

 

USDA confirmed the first sale of US corn to China on April 28, totaling 115,000 tonnes. Since then, China has purchased 595,100 tonnes.

 

CBOT soy futures for July delivery ended down 14 cents at US$9.37 and were also weighed down by good growing conditions and the dollar rally.

 

Declines were limited by options action as traders bought new-crop November US$11.00 calls, traders said.