US corn steady on tighter supply, wheat falls
Wheat fell around 1 percent, while soybeans edged lower in early Asian trade, as the two markets were pressured by larger-than-expected supplies.
FUNDAMENTALS
US corn stocks will shrink to their smallest size in 15 years before corn harvest begins this autumn, a tighter supply than analysts expected due to a boom in fuel ethanol production and surging demand from China, the US Department of Agriculture said.
It said separately that exporters sold 233,000 tonnes of US corn to unknown destinations for delivery during the 2011/12 marketing year.
The USDA's 2010/11 (September/August) corn ending stocks estimate was about one-fifth larger than its forecast last month, but the estimated stockpile of 880 million bushels was below trade expectations for 905 million.
On Tuesday, short-covering and strength gave added momentum to Chicago wheat, although USDA boosted its estimate of the wheat crop by 2.3 percent, to 2.106 billion bushels, mostly due to "excellent growing conditions" for soft red winter wheat.
Weather concerns added to corn's rise, as hotter temperatures in the US Midwest this weekend and into next week may stress the grain as it enters its key pollination stage.
Strong cash values for corn also drove the futures as competition for shrinking supplies of the grain heated up between domestic processors and exporters.
The soybean stockpile will total 200 million bushels at the end of this summer -- traders expected 198 million bushels -- and 175 million bushels in autumn 2012, down 4 percent from trade forecasts, the USDA said.
MARKETS NEWS
The euro fell to its lowest level against the dollar in four months and hit another record low against the Swiss franc on Tuesday on fears that euro-zone leaders are failing to contain risks of peripheral debt.
Oil rose on Tuesday, shaking off two days of losses to turn positive on the dollar's intraday weakness and supportive technicals.
US stocks closed lower for a third straight day on Tuesday as Europe's fiscal woes and a weak start to tech earnings gave investors little reason to buy even after the recent losses.
Copyright Reuters, 2011