GRAINS-Grains down on macroeconomic worries, weather outlooks

Thu Jun 20, 2013 4:47pm EDT

Related Topics

* Broad sector weakness on Fed policy outlook, China data
    * Weather forecasts downplay heat in U.S. Midwest
    * Wheat losses limited by short-covering, US yield concerns


    By Julie Ingwersen
    CHICAGO, June 20 (Reuters) - U.S. grain prices fell on
Thursday amid a broad-based commodity selloff and a firming
dollar, a day after the U.S. Federal Reserve signaled it was
ready to slow down the pace of bond purchases.
    The Fed news sent shock waves across all the financial
markets. Wall Street stocks fell more than 2 percent, U.S. crude
oil fell more than $3 a barrel and gold prices tumbled to their
lowest levels in more than 2-1/2 years. 
    Additional pressure on grains stemmed from economic data
from China, the flash HSBC Purchasing Managers' Index, which
hinted at weakening in the world's second-largest economy.
 
    "The Chinese PMI came in at 48.3 according to HSBC, and that
is down almost one point from the month before. It was expected
to be down only 0.10 of a point," Sterling Smith, futures
specialist with Citigroup in Chicago, said in a daily note.
    China is the world's biggest buyer of soybeans, making the
oilseed market particularly sensitive to news about the
country's economic health.
    At the Chicago Board of Trade, July corn ended down 9
cents at $6.73-1/4 per bushel, halting a four-day rally.
New-crop December corn fell 10 cents at $5.60-1/2.
    July soybeans declined 25-1/2 cents to $14.97-1/2 per
bushel, settling below $15 for the first time since May 30.
New-crop November ended down 25-3/4 cents at $12.85.
    July wheat settled down 6-1/2 cents at $7.00-1/2 a
bushel.
    
    WEATHER WORRIES SUBSIDE
    Weather outlooks calmed fears of excessive heat in the U.S.
Corn Belt and pressured new-crop corn and soybeans.
    "Yesterday some of the forecasters were talking about a
high-pressure ridge next week, and they have taken that out of
the equation," said Joe Vaclavik, president of Standard Grain, a
Chicago brokerage.
    "We needed some warmer temperatures, but if you get one of
these extreme high-pressure ridges that can lock in 95- to
100-degree (Fahrenheit) temperatures for a week or two, that
becomes a big problem. And it looks like we are going to avoid
that for the time being," Vaclavik said.
    
    WHEAT PARES LOSSES
    Wheat futures fell, but the market drew underlying support
from short-covering and some concern about yields as the U.S.
harvest of hard red winter (HRW) wheat moves into Kansas, the
top-producing state.
    "People have come to the conclusion that HRW yields are not
as good as they thought," Roy Huckabay, of Chicago brokerage the
Linn Group, said.
    Support also stemmed from expectations of strong domestic
demand for newly harvested wheat from livestock feeders, given
currently high cash prices for feed corn.
    Kansas City Board of Trade HRW wheat futures traded higher
for part of the session, but the July contract finished
down 2-3/4 cents at $7.37 a bushel.
    
 Prices at 3:16 p.m. CDT (2016 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  673.25    -9.00  -1.3%   -3.6%
 CBOT soy                  1497.50   -25.50  -1.7%    5.6%
 CBOT meal                  445.60    -8.00  -1.8%    5.9%
 CBOT soyoil                 48.40    -0.95  -1.9%   -1.5%
 CBOT wheat                 700.50    -6.50  -0.9%  -10.0%
 CBOT rice                 1597.50   -30.50  -1.9%    7.5%
 EU wheat                   200.00     0.25   0.1%  -20.1%
 
 US crude                    94.94    -2.84  -2.9%    3.4%
 Dow Jones                  14,758     -354  -2.3%   12.6%
 Gold                      1280.49   -70.20  -5.2%  -23.5%
 Euro/dollar                1.3224   -0.007  -0.5%    0.2%
 Dollar Index              81.7870   0.3590   0.4%    2.5%
 Baltic Freight               1012       17   1.7%   44.8%
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