Thu Jun 21, 2012
* Corn leads the way down, drops almost 2 percent
* Weather concerns persist, market continues to monitor impact
* Rain extends ship lineups at Brazil's commodities ports
By Colin Packham
SYDNEY, June 21 (Reuters) - U.S. corn fell on Thursday as investors took profits after stellar gains earlier in the week, while disappointment that the U.S. Federal Reserve did not introduce more aggressive stimulus measures to boost the economy also dragged down grains prices.
Risk aversion swept across financial markets, with Asian stocks outside Japan and commodities dropping broadly after the Fed extended its programme of selling short-term securities and buying longer-dated ones, disappointing investors who had hoped for a third round of quantitative easing.
But losses in grains and oilseeds were checked by the threat to yields from unfriendly crop weather.
"We are seeing a risk-off day," said Luke Mathews, commodities strategist for the Commonwealth Bank of Australia. "The crude oil market is extending its very sharp losses from yesterday on the back of negative sentiment flowing around the market, and that influence is flowing through into grains."
Chicago Board Of Trade new-crop December corn slid 1.8 percent to $5.56-1/2 a bushel by 0318 GMT, having dropped as low as $5.53-3/4 a bushel earlier in the session.
Despite the fall, new-crop corn remains up 10 percent on the week - most of its gains having been recorded during the first two days of the week - on concerns a hot, dry weather across the Midwest would further damage crop quality and threaten yields.
November soybeans fell 0.8 percent to $13.83-3/4 a bushel, while July wheat fell 1.3 percent to $6.55-1/2 a bushel after climbing 2.2 percent in the previous session.
Concerns the USDA might cut its forecast of 2012/13 world wheat production in its next monthly report in July are expected to keep a floor under prices of the grain.
Black Sea wheat production continues to be closely monitored after SovEcon Chief Executive Andrei Sizov Sr. on Tuesday cut his forecast of Russia's 2012/2013 wheat crop to 50 million tonnes, down from 53 million about a month earlier.
CROP OUTLOOK
The U.S. Department of Agriculture on Monday confirmed continued damage to new-crop corn and soybeans, while unfavorable weather persists in key growing regions.
Dry weather is expected to keep stress on U.S. Midwest corn and soybean crops for at least the next two weeks, an agricultural meteorologist said on Wednesday.
Soybeans, which have gained recently over weather worries, could see further disruption to supplies from Brazil, the world's second largest exporter.
Rain in southern Brazil is extending ship lineups at the country's largest agricultural commodities ports, Santos and Paranagua, where more than 250 vessels are waiting to shift fertilizers, grains, sugar and other cargoes, the authorities said on Tuesday.
The Paranagua port authority, known as Appa, said 30 ships were waiting to take on bulk cargoes such as soy, corn and sugar.
Grains prices at 0318 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 655.50 -8.50 -1.28% -0.23% 614.51 64
CBOT corn 556.50 -10.00 -1.77% -15.49% 607.14 57
CBOT soy 1434.25 -12.25 -0.85% +16.84% 1162.13 61
CBOT rice $14.41 -$0.09 -0.62% -1.64% $14.43 58
WTI crude $80.38 -$1.07 -1.31% -21.93% $98.20 25
Currencies
Euro/dlr $1.267 -$0.027 -2.10% -2.90%
USD/AUD 1.015 -0.021 -2.05% -2.07%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Editing by Himani Sarkar)
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