US wheat futures slid to a one-month low on Monday, pressured by a rising dollar as investors feared a worsening debt crisis in the euro zone. Movements on grain markets were timid, however, as operators awaited US government crop estimates that will give a gauge of how tight US corn and soybean supply will be after a weather-affected growing season.
Chicago Board of Trade benchmark December wheat fell 0.1 percent to $7.28-3/4 a bushel by 1040 GMT, after earlier slipping to $7.24-1/2, its lowest level since August 11. CBOT December corn lost 0.34 percent to $7.34 a bushel, while November soy inched up 0.09 percent to $14.28 a bushel.
In Europe, benchmark November milling wheat was up 0.24 percent at 207.25 euros a tonne, with some support from the weaker euro. World share prices fell 2 percent and the euro sank to a seven-month low against the dollar as markest remained nervous about a possible debt default by Greece.
An absence of fresh measures at a weekend meeting of the Group of Seven industrialised countries, coupled with the resignation of a top German European Central Bank board member, raised further doubt on the prospects for resolution of Europe's sovereign debt crisis. Grain and oilseeds have held up better than equity markets since last month, drawing fundamental support from a declining outlook for US crops.
Monday's monthly estimates from the US Department of Agriculture could bring fresh impetus to grains if the USDA cuts its crop forecasts steeply, but operators said macro-economic concerns could still blunt this fundamental strength. A strong report may see prices rebound, particularly given that drought conditions continue across the US Great Plains, negatively impacting hard red winter wheat planting," Commonwealth Bank of Australia strategist Luke Mathews said in a report.
?But the European financial crisis will provide a stiff headwind to prices." A group of 28 analysts and crop forecasters polled by Reuters ahead of the report estimated, on average, this year's corn crop at 12.519 billion bushels, down 3 percent from the USDA's outlook in August. The average US 2011 soybean production estimate was 3.032 billion bushels, down 0.8 percent from USDA's August figure of 3.056 billion. It would be the smallest US soybean crop in three years. Some analysts think the size of the crops will be further downgraded in future USDA reports, due to the combination of heat stress during pollination and the decimation of corn area by record flooding in the western Midwest.
Comments
Comments are closed.