Grains tumble

Grains tumbled on Thursday as investors fled risk assets to safe havens like the dollar on renewed concern over the eurozone debt crisis, with wheat slumping over 3 percent, the biggest drop in almost two months. Corn futures at the Chicago Board of Trade fell more than 2 percent on the strong dollar and on forecasts for rains next week in Argentina, where dry weather had helped to rally grains in recent weeks.
And soyabeans turned down, notching the biggest one-day drop since mid-December as corn and soya each reversed advances for three consecutive trading sessions. "The outside markets are pressuring everything and people are taking a step back because of the rains in Argentina early next week, they want to see what happens now after the rains," said Rich Nelson, director of research for Allendale Inc.
CBOT wheat for March delivery was down 20-3/4 cents at$6.29-1/4, March corn was down 15 at $6.43-1/2 and soya forJanuary delivery was down 20-1/4 at $12.01-1/4 per bushel. Traders and analysts said there was profit-taking in each market and markets were taking a breather after early this week hitting a three-month high in wheat and a two-month high in corn and soyabeans.
"On the first day of the year, you could see the traditional money coming into the markets - I think it's new money being put to work. But I think the hangover is starting to come back in," said Robert Bresnahan of Trilateral Inc in Chicago. "The dollar is going to continue to strengthen, Europe is in trouble. Those issues are going to come back to the forefront."
Corn and soyabeans had been leading the way up through the waning weeks of 2011 on hot and dry weather in Argentina, the world's second largest corn exporter and third largest soyabean exporter. Despite forecasts of rain early next week in Argentina, concerns remain since the corn crop is pollinating and soyabeans will soon be setting pods, both of which are critical growth stages for the crops.
"Hot and dry weather will continue through the weekend in Argentina but guidance is quite wet for early next week where good rains appear likely in Buenos Aires on Monday and Tuesday," said Joel Widenor, meteorologist for Commodity Weather Group. Widenor said hot and dry weather would return after the early week rains. Unrelenting sun in Argentina has scorched as much as a fifth of its corn crop and the drought will start biting into the country's vast soya harvest unless rains come to the rescue this month or next, South American crop experts said. Also, there are weather concerns in Brazil, which has been earmarked to surpass the United States this year as the world's largest soyabean exporter.