January 20, 2012

US corn, wheat futures drop to record low

The corn and wheat futures of the US fell to the lowest level in nearly a month on Wednesday (Jan 18) in hope of much-needed rain over the weekend giving relief to Argentina's dried crops.

The weather-related weakness in corn spilled over to wheat, which also was under pressure from plentiful global stocks and light demand for US supplies on the export market.

Soy fell in line with wheat and corn early but found support around the 30-day and 50-day moving averages.

Some talk of Chinese demand for US soy also helped bolster soy prices. The latest weather forecast boosted expectations for rain in South America, predicting that as much as 1.5 inches could fall in Argentina during the weekend.

March corn fell US$0.10 1/2 to US$5.93 1/2 a bushel. Prices bottomed at US$5.92 1/2 during the session, their lowest since hitting US$5.84 1/4 on December 19.

March wheat fell US$0.12 1/2 to US$5.92 1/4 a bushel, hitting a low of US$5.90 during the session. The intraday low was the lowest level since US$5.81 3/4 on December 19.

March soy were unchanged at US$11.83 1/2 a bushel.

"It's a little wetter in southern Argentina Saturday through Monday," said Andy Karst, meteorologist with World Weather Inc. "That is probably the biggest change."

The forecast reinforced expectations for needed rain that South American farmers hoped would stabilise a crop that already has lost much of its potential due to the dryness.