Grains tumble

US grain futures tumbled on Wednesday, with wheat and corn each falling to a three-month low, in tandem with many other commodities as investors cut their exposure in risk assets in favour of safe havens like the dollar. Grains were under additional pressure from good crop weather in the United States, which raised prospects for ample supplies in the world's top exporter of corn, soyabeans and wheat.
Corn futures plunged 2.4 percent while soyabeans shed more than 1 percent amid a broad sell-off that saw crude oil, gold and equities all losing ground. "The dollar is slightly higher and these outside markets are weaker. Now that we saw the corn planting progress and the wheat conditions, it reinforces the idea that every day we are marching closer to a big crop," said Don Roose, analyst at US Commodities in West Des Moines, Iowa.
The greenback gained against the euro as debt worries in the euro zone mounted a day ahead of a bond sale in Spain, the zone's fourth largest economy. "It's a risk-off day. We have a real bearish attitude about the world economy, with the macros overshadowing everything here," said Joe Christopher, an analyst and grain merchandiser at the Crossroads Co-Op in Sidney, Nebraska.
Corn futures ended 15 cents lower at $6.01-3/4 cents per bushel, briefly falling below the psychological $6-per-bushel level for the first time since late January. The closely-watched premium of CBOT July contract over new-crop December fell to 65-1/4 cents, also smallest since January.
Old-crop corn supplies are expected to shrink to the lowest in 16 years by the end of the summer, but farmers are forecast to plant the largest corn area since 1944, which will help replenish grain stockpiles. Spring wheat plantings also advanced at a record rate, with spring wheat futures leading the decline among US wheat varieties.
Benchmark CBOT wheat ended 4-3/4 cents lower at $6.10-3/4 cents, with wheat trimming its losses and briefly turning positive as traders covered short positions after futures hit the lowest level since Jan. 20. Spring wheat futures also were lower, but had trimmed earlier losses at the Minneapolis Grain Exchange. CBOT May soyabeans settled 18 cents lower at $14.07-3/4, a decline of 1.3 percent.