US grains fell on Wednesday, with wheat prices hitting the lowest levels since June 2010 as a rising dollar made the cereals less attractive in global markets, traders said. Wheat now has declined six sessions in a row, shedding more than 8 percent in the worst such skid since July while corn fell after hitting a three-week peak on Tuesday. Soyabean futures were slightly higher, hovering near a roughly one-month high.
Chicago Board of Trade wheat for March delivery settled 4-1/4 cents lower at $4.67-1/4 per bushel, just above its lifetime low of $4.65-1/2 reached earlier in the session. The dollar hit a 12-year high against a basket of currencies, helping to expand the competitive disadvantage for US wheat and corn, which are already more expensive than supplies shipped out of the Black Sea and South America.
"The stronger dollar continues to weigh on feed grains," EFG Group analyst Tom Fritz said. "Corn is also reeling from the weaker energy markets. We tried to rally the corn on EPA boosting demand for ethanol, but a lot of people don't see gasoline demand giving corn a boost." The US Environmental Protection Agency on Monday slightly increased its blending requirements for grain-based ethanol into the domestic fuel supply, implying increased corn demand. However, ample global oil supplies pressured crude oil, gasoline and ethanol futures.
Weekly US data also showed ethanol production last week fell sharply from the record-large rates of the previous week. Argentina's farmers are racing to plant more corn now that a new farm-friendly government is taking power, increasing the area planted by 10 percent over previous estimates, and making more exports likely from one of the world's biggest suppliers.
Feed mills in Malaysia, Vietnam and Indonesia were said to be delaying corn purchases on expectations of cheaper offerings out of Argentina. Most-active CBOT March corn was down 3-1/2 cents at $3.70-1/4 per bushel, declining after rising the first two days this week. Soyabeans for January delivery were up 3 cents at $8.92-1/4 per bushel, rising from the more than six-year lows reached in mid-November.
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