US corn on Thursday stayed close to a four-week high reached the day before due to supply concerns and a weaker dollar drawing investors into commodities. The greenback fell to a record low against the Swiss franc amid expectations of further monetary easing by the US Federal Reserve and a credit warning on US debt, which makes commodities priced in dollars more competitive.
"The focus is on debt problems in the US and Europe and what is happening in the equity markets," said Ker Chung Yang, analyst at Phillip Futures in Singapore. "Corn and soybeans are still supported by Tuesday's USDA report and the weather concerns are getting more intense as we are getting into the critical pollination stage for corn," he added. Corn and soybean crops in the US Midwest could suffer from hot and dry weather forecast for just when the corn crop is expected to pollinate, a factor which determines yields.
The US Department of Agriculture on Tuesday estimated US corn stocks would dip to their lowest level in 15 years before the harvest begins this autumn due to a boom in ethanol production and surging Chinese demand. Chicago Board of Trade new-crop December corn slipped 1 cents to $6.78? a bushel by 1112 GMT, which compares with Wednesday's four-week peak of $6.88. September wheat slid 0.98 percent to $7.07? a bushel, after earlier rising as high as $7.20?, just shy of a four-week maximum of $7.21 in the previous session. The November soy contract rose 0.49 percent to $13.86? a bushel.
CBOT wheat has been further supported by short-covering as speculators exited spreads against other markets. Commodity funds were net buyers of an estimated 20,000 contracts of Chicago Board of Trade corn futures on Wednesday, trade sources said. They were net buyers of 7,000 soybean contracts and 10,000 wheat. Comments on Wednesday by US Federal Reserve chairman Ben Bernanke that the central bank is ready to ease monetary policy further helped drive up the commodities benchmark Reuters-Jefferies CRB index 1.4 percent by making the dollar weaker.
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