August 16, 2011 / 12:35 AM / 8 years ago

U.S. grains futures ease on firmer dollar

SYDNEY (Reuters) - U.S. corn, soybeans and wheat futures suffered modest losses in early Asian trading on Tuesday as the market weighed up a mild recovery in the U.S. dollar against an expected down-grading in crop conditions which have stabilized in the U.S. grain belt.

Prices were down after rebounding on Monday as the U.S. stock market rose on renewed investor confidence in riskier assets and a weaker dollar encouraging export business.

Chicago Board of Trade (CBOT) corn futures for December delivery, the actively traded harvest contract, slipped 0.14 percent to $7.19 per bushel.

The actively traded November soybeans contract eased 0.11 percent to $13.49-3/4. while wheat for September delivery dropped 0.28 percent t0 $7.10- per bushel.

FUNDAMENTALS

* Fundamental support for corn prices on Monday stemmed from a U.S. Department of Agriculture (USDA) report last week projecting lower output following heat damage to the crops in July.

* Weekend weather did not provide as much rainfall for thirsty Midwestern corn and soybean crops as many had expected.

* The wheat market found support from a large sale of wheat to Saudi Arabia and drought in the U.S. Plains that was leading to concerns about seeding the hard red winter wheat crop to be harvested next year.

* Saudi Arabia bought 660,000 tonnes of wheat from Australia, Europe, Canada and the United States at an average price of $346 per tonne, including cost and freight.

* U.S. corn and soybean ratings have steadied after rain and cooler temperatures in the Midwest stabilized the crops, which had been suffering through a dry, hot summer.

* In a weekly report the USDA reported the good-to-excellent ratings for both crops were the lowest for mid-August in four years, reflecting the late planting and the scorching July heat that robbed yield potential from corn and soybeans.

The USDA report rated the corn crop 60 percent good to excellent, unchanged from a week ago and in line with the average of estimates given by eight analyst polls.

MARKET NEWS

* Wall Street stocks rose for a third day on Monday as investors saw Google's offer for phone maker Motorola Mobility as an excuse to jump back into the market after weeks of sharp selling. The Dow Jones industrial average .DJI shot up 213.88 points, or 1.90 percent, to 11,482.90. <.N}

* The Swiss franc fell to a two-week low against the euro and dollar on Monday on speculation the Swiss National Bank may soon take action to curb gains in the currency by setting an exchange-rate target this week.

* Oil rose almost $2 a barrel on Monday, supported by optimism that European leaders will come up with solutions to the region’s debt crisis and by broader gains in global markets.

U.S. crude traded up $2.50 to settle at $87.88 a barrel.

Reporting by Bruce Hextall; Editing by Ed Davies

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