SINGAPORE: Chicago corn fell around half a percent on Thursday, trading close to a four-week low as the market was pressured by prospects of weakening demand for US supplies, while wheat edged lower on outlook for bigger global crops.
Soybean futures rose 0.2 percent, after dropping for three straight sessions on poor demand for US beans in the fourth quarter of the year, the country's peak marketing season.
"At this stage the bad news that was being whispered has been priced in the market," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore.
"Another shift higher will need more tightness in stocks and further downward revision in ending stocks."
Chicago Board of Trade benchmark December corn fell 0.5 percent to $7.20-3/4 a bushel at 0342 GMT, not far from Wednesday's low of $7.16-1/2 a bushel, the lowest since August 19.
December wheat fell 0.3 percent to $7.01-1/2 a bushel, while November soy rose 0.2 percent to $13.86 a bushel.
The US Agriculture Department this week slashed its US corn usage forecast for the 2011/12 marketing year by a total of 400 million bushels, cutting corn use by exporters, ethanol makers and livestock producers. That largely offset USDA's 417-million-bushel drop in its corn production outlook.
In the wheat market, Russia secured another large tender, weighing down US prices.
Egypt, the world's top wheat importer, continued to favor Russian wheat, booking a total of 420,000 tonnes in its latest tenders for import in November and December.
Exporters offered no US wheat for a second consecutive tender by Egypt's government wheat buyer because US prices were deemed not competitive with cheaper Russian grain.
Since the start of the 2011/12 fiscal year on July 1, Egypt has purchased 1.98 million tonnes of Russian wheat and 180,000 tonnes of Romanian wheat.
The soybean market has been pressured by China taking larger volumes from South America in October-December period which is normally peak marketing season for the United States after the harvest.
China is expected to ship nearly half of its soy imports from Brazil and Argentina in the fourth quarter on competitive offers from South America, which is sitting on plentiful stocks after this year's bumper harvest, traders in Asia said last week.
The world's top soybean buyer is expected to take up to 7 million tonnes of soy from Brazil and Argentina in the October-December period from a total estimated import demand of 15 million tonnes, compared with around 5 million tonnes shipped a year ago.
News that China was likely to reap another bumper grain harvest this year, and output may rise 3 percent from a year ago to a record of more than 560 million tonnes, also weighed on sentiment.
Still, the market is keeping a close watch on US Midwest weather where early frost is likely to threaten crops.
Temperatures fell below freezing in eastern North Dakota and northwestern Minnesota on Wednesday morning and the cold snap was expected to hit a broader area of the US Midwest on Thursday and Friday, according to a forecaster.
Commodity funds were net sellers of an estimated 4,000 contracts of CBOT corn futures on Wednesday, trade sources said. They were net sellers of 4,000 soybean contracts and net buyers of 1,500 wheat contracts.
Copyright Reuters, 2011
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