US wheat, corn and soyabean futures all fell on Wednesday on deepening concerns about the global economic outlook after poor macroeconomic news, traders and analysts said. "I think clearly the correlation between the agricultural markets and the macro markets continues to be very strong and today is just another reflection of that," said Rabobank analyst Luke Chandler. "The US dollar is stronger and agriculturals are pretty much down across the board."
World equities hit their lowest in six weeks on Wednesday and oil prices fell after China's November factory activity shrank at its sharpest pace in 32 months, reviving fears of an abrupt slowdown for the world's second largest economy. The dollar hit a six-week high against a currency basket on Wednesday, boosted by poor demand at a German debt auction and worries that new talks to rescue Belgian-French bank Dexia may raise concerns about fiscal pressures on France.
Chicago Board of Trade December wheat fell 1.6 percent to $5.84-1/4 bushel at 1210 GMT. Chicago Corn for December delivery dropped 1.6 percent to $5.89-1/2 per bushel. January soyabeans lost 1.4 percent to $11.36-3/4 per bushel. European markets were also weaker, pushed down by the US losses. Europe's benchmark wheat, the Paris January contract, fell 2.5 euros or 1.3 percent to 178.75 euros a tonne. A stronger dollar makes US grains more expensive in global export markets.
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