February 25, 2009

US grain futures fell Tuesday (Feb 24) on growing concerns of the country's financial system, and European wheat follows suit.

CBOT March corn fell 0.9 percent to US$3.48-1/2 per bushel, and soy for March delivery fell 0.7 percent to US$8.67 per bushel.

US wheat for delivery declined 0.7 percent to US$5.06-3/4 per bushel, languishing near two-month lows.

European wheat for March dropped 1.2 percent to EUR139.25 per tonne, also pressured by good growing weather in the region and poor demand. Traders said the EUR139 support had been hit but not broken.

Although the dollar was lower against the euro, it struck a three-month high against the yen on Tuesday, increasing the cost of US priced commodities for many foreign importers.

The world economic slowdown is pulling grains down everywhere and there is no sign of improvement soon, a European trader said.

Importers are switching to lower-priced countries such as Russia and Ukraine, which tightens competition, according to agricultural commodity markets analyst Luke Chandler.

Egypt, one of the world's largest wheat importers, bought 240,000 tonnes of Russian wheat on Monday (Feb 23) but nothing from the US or the EU.

US soy remains supported by purchases from China, but improved weather conditions had boosted crop prospects in Argentina, the world's third largest soy exporter. Also, the current farmers' strike in Argentina over export taxes and farm policy is expected to have minimal impact.