December 7, 2011

CBOT grains fall on weak export prospect

CBOT grains tumbled on Monday (Nov 5), as the prospect for US grain export came below expectations amid tough competition around the world.

Besides, a strong recovery in US dollar as well as weakness in energy and gold market added to the negative tone.

The most active corn contract for March delivery closed at US$5.91 per bushel, down US$4.25, or 0.7%. March wheat shed US$0.14, or 2.2%, to US$6.16 per bushel. January soy lost US$0.95, or 0.8%, to US$11.26per bushel.

Market analyst said that US weekly export inspections were much lower than traders' expectations, clouding the prospect of US grain export. The weekly inspections of wheat and soy only amounted to 14.49 million bushels and 31.6 respectively.

Analysts added that US exporters will still have a tough time in competing on the world market. Meanwhile, grains were also pressured by a strong rebound in US dollar, which weighed on the commodities that are priced by dollar, including crude oil and gold. The Dollar Index, which measures the price of dollar against six other currencies, Monday traded at 78.57, up 0.07% from prior trading day.

Besides, market hearsay went that Argentina will approve additional corn for export from the 2010/2011 season, adding to the negative tone late on the corn market.