US corn and soy futures weaker as wheat prices climb

 

 

Sliding corn futures led most US grains markets lower by midday late last week, on expectations of bountiful US corn and soy crops due to favourable growing conditions in the US Midwest.

 

US wheat prices were higher at midday as investors covered short positions on technical signals after a lower opening on export competition, good growing conditions and harvesting of the new winter wheat crop.

 

Analysts cited position-squaring ahead of the three-day Memorial Day holiday weekend, along with uncertainty with the world economy and jitters that weather conditions could change quickly.

 

Corn prices on the CBOT led grain markets lower on profit-taking and follow-through selling the day after USDA issued disappointing export sales data.

 

But corn was underpinned by Chinese import demand. Grain industry sources said on Thursday that 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.

 

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

 

Fluctuations in the dollar added little to pricing direction, though investors were watching currency moves as the dollar trimmed gains against the euro, making dollar-priced commodities more attractive to holders of other currencies.

 

US wheat prices opened lower after Egypt purchased of 180,000 tonnes of Russian wheat for June 20-30 shipment, and bought none from the US. But wheat rebounded quickly, with futures holding gains at midday.

 

The advancing US winter wheat harvest, which should begin in top producer Kansas by June 9, also pressured prices. But that was at least partly offset by news that Ukraine's 2010 wheat crop was likely to decline due to harsh winter weather.

 

And traders said short fund positions and technical indicators were pushing prices higher Friday.

 

Still, wheat remained anchored by large global supplies, despite adverse weather in some countries that could trim output.