Wheat, corn add to losses as economic woes weigh

KANSAS CITY: US wheat futures fell more than 3 percent on Monday, extending losses as global economic woes fed fears of weaker demand for key commodities.

Corn futures also dropped, losing more than 2 percent as investors eyeing the Greek debt crisis, concerns about Chinese inflation and slow US growth moved to liquidate long positions in grains and oilseeds and end a year-long rally.

Traders were also keeping a close eye on fundamentals for the new US corn and soybean crops. Advancing US winter wheat harvest and improved crop weather for recently planted US corn were bearish factors for markets as well.

"There is no threat in sight for corn, and we're right in the middle of wheat harvest," said Newedge market analyst Dan Cekander.

Chicago Board of Trade wheat for July delivery was down 3 percent at $6.16-3/4 a bushel by 1552 GMT, adding to a 2 percent fall on Friday that was also driven by economic fears.

US corn also extended declines from Friday. CBOT July corn was down 2.5 percent at $6.53-1/4, while July soybeans were down 7-3/4 cents, or 0.6 percent, at $13.12-1/2 after sliding early to $13.10-1/2.

Nearby July corn broke through key support at its 200-day moving average of $6.55-3/4 early in trading. The nine-day RSI put corn in technically oversold territory. Wheat was also seen as technically oversold.

LOOKING AHEAD

The US Department of Agriculture issues its anxiously awaited annual acreage report on Thursday, along with its quarterly US grain stocks data. The acreage report, based primarily on a survey of farmers in the first two weeks of June, could shed light on whether excessive rains and flooding from the upper Midwest to the South affected the seeding of the corn and soy crops.

But many analysts believe the reports will be devoid of any major surprises and will have only a fleeting impact on markets.

Demand for corn has remained strong from the livestock and ethanol sectors despite the high prices, but demand for US exports has waned. Corn export sales last week were down 40 percent from the previous week due to stiff competition from feed wheat.

Weekly export inspections of US corn issued Monday by USDA for the week ended June 23 totaled 28.9 million bushels, down 34 percent from the prior week and 27 percent lower than the same week a year ago.

Copyright Reuters, 2011