US corn, soy turn into lower

LONDON: US corn and soybeans turned lower on Friday as a rally in equity markets stalled and the dollar strengthened while wheat prices were little changed.

A rally for European stocks and the euro ran out of steam on Friday, with markets focused on debt talks between Greece and its private creditors that may prove the trigger for the next leg of the euro zone's debt crisis.

Dealers said weather in South America remained a key focus with recent rainfall improving the outlook for corn and soybean crops in Argentina and helping to keep a lid on the market.

"The biggest constraint on price rises is that those production concerns in South America have eased compared with a fortnight ago," said Luke Mathews, Commodities Strategist at Commonwealth Bank of Australia.

Chicago Board of Trade corn for March delivery fell 1-3/4 cents or 0.3 percent to $6.04-1/4 a bushel by 1220 GMT. The contract remains on track to snap a two-week losing streak with a small weekly gain of about 0.8 percent. Much-needed rain was expected in dry crop areas of Argentina Friday through Tuesday.

"We are expecting widespread rains throughout South America this weekend and into early next week," said Mathews. "There is a forecast of follow up rain a week or so after that, so it appears that significant crop production concerns in Argentina have eased."

Corn yields in Argentina are likely to still be well below last season after a dry spell during the key pollination stage. "For now we're in a wait-and-see phase," a French futures dealer said. "We're waiting to see what the weather brings."

Argentina's government also said on Thursday that there would be losses in late-planted soy areas which have received practically no rain since they were sown.

CBOT March soy fell 5-1/4 cents or 0.4 percent to $11.91-3/4. The contract is on track for a weekly gain of nearly three percent.

"Markets will continue to focus on South American weather and future USDA cuts in Argentine/Brazilian corn production estimates cannot be ruled out," Jonathan Lane trading manager of UK merchant Gleadell said in a market note on Friday.

Lane added, however, that "fundamentals of the market still point to abundant supplies of wheat and other feed-grains."

CBOT March wheat was unchanged at $6.05-3/4 a bushel and was on track for a marginal weekly gain of 0.6 percent. March milling wheat in Paris was also flat at 198.50 euros a tonne.