US and European corn, wheat futures ease

US and European corn and wheat futures eased on Friday after strong gains in the previous session fuelled by a bigger-than-expected cut in the US government outlook for corn and soybean output this year. Chicago wheat ticked lower, after rising nearly 7 percent in the last three sessions amid concerns over spring wheat output and tracking corn higher.
"There was a bit of euphoria yesterday. The market is calming down. The financial context remains gloomy and wheat stocks at the end of the season are important," said a Euronext trader. World shares edged up on Friday cheered by a ban on short-selling financial shares in some European countries, and the stocks rally boosted the euro against the dollar and the safe-haven Swiss franc, but concerns about the euro zone debt crisis remained.

"Profit taking in Chicago before the weekend shouldn't be ruled out," said another one. In its first estimate of the crop based on field surveys, the US Agriculture Department slashed on Thursday its estimate of corn yields by 4 percent. Farmers will now bring in a barely adequate harvest of 12.9 billion bushels, instead of the record crop that was within reach until the heat hit. The USDA also took down its output forecast for soybeans, placing the crop at 3.056 billion bushels, below the lowest trade guess.
Prospects for corn and soybeans could weaken further as the dry and hot conditions have persisted since the survey and could push prices higher, analysts said. "Assuming financial markets stabilise, US corn futures are likely to test, if not exceed, the June record-high price of around $8.00 per bushel," Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report.
Chicago Board of Trade actively traded December corn was flat at $7.14 a bushel by 1134 GMT, while November soy ticked up 0.09 percent to $13.33 a bushel. September wheat was down 0.25 percent to $6.99-1/2 a bushel. Corn futures fell to a one-month low earlier this week amid plunging equities, but losses in grain futures have been limited since as supplies have tightened in the United States.
In Europe, wheat prices edged lower after gains on Thursday but concerns about rainy weather in Germany underpinned the market. "We may see a downside revision of the EU wheat crop next month because of continued rain and likely crop losses as a result," Commerzbank said in a note referring to the next USDA report. Euronext benchmark November milling wheat was down 1.00 euros or 0.51 percent to 196.50 euros a tonne by 1153 GMT, after touching a six-week high on Thursday following the USDA report. Some analysts said demand rationing by animal feed producers and the ethanol industry could limit the upside potential in corn prices.