KUALA LUMPUR: US corn and wheat prices recovered some ground on Tuesday after a more than 1 percent drop in the previous session, but prices held below $6 a bushel as a grim global economic outlook weighed on sentiment.
Corn hit a seven-week low and wheat plunged to its lowest in nearly five months on Monday on persistent fears about the euro zone debt crisis and news that a congressional effort to rein in ballooning US debt has ended in failure.
"In the past two months, the market's tracking what's happening on the general economy," said Lynette Tan, an analyst at Phillip Futures in Singapore.
"The prospect of an economic slowdown means no new demand, and with a lack of demand, we're looking for more downside on grains."
Chicago Board of Trade (CBOT) corn for December delivery gained 0.2 percent to $5.98-3/4 per bushel, snapping four days of declines. It hit a low of $5.93-1/4 on Monday, going below the $6 dollar mark for the first time in more than a month and touching its lowest since Oct. 5.
December wheat climbed 0.3 percent to $5.93-1/2 per bushel after falling to $5.84-1/2 in the previous session, the lowest since July on the continuation chart. Prices dropped 3 percent last week because of euro zone concerns and abundant global supplies.
Most-active January soybeans slipped 0.2 percent to $11.45-1/2 per bushel. The previous session's 1.8 percent drop was the largest in a month.
Weekly grain export inspections fell short of expectations. The US Department of Agriculture said 11.597 million bushels of wheat were inspected, below estimates for 12 million to 16 million, and 40.762 million bushels of soybeans were inspected, below estimates for 45 million to 50 million.
The USDA, in a weekly crop report, said the corn harvest was 96 percent complete, above the five-year average of 88 percent for this time. The government said half of the recently planted winter wheat crop was in good to excellent condition, up from 47 percent a year ago. The crop will be harvested in the spring and early summer.
The outlook for US wheat was also gloomy as Black Sea countries offered less-expensive grain. Over the weekend, Egypt, the world's top wheat buyer, said it purchased 240,000 tonnes of Russian, Ukrainian or Kazakh wheat and none from the United States.
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