US corn, wheat and soyabeans futures edged down on Friday as the market awaited news on the US debt talks. Corn and wheat prices had rebounded in early trade on Friday following a fall on Thursday but reversed direction as the dollar rose against the euro and concerns about a possible US credit rating downgrade grew.
Weather forecasts are also being keenly watched as crops mature in the northern hemisphere and concerns remain that sizzling heat in the US Midwest last week might have hurt corn and soyabean yields, despite kinder weather this week. "Really there will be no direction until the US debt situation is sorted out, while the weather situation in the US means yields for corn and soyabeans will be affected because temperatures have been too high," said Benson Wong, a trader at Sydney-based Commodity Broking Services.
Gold fell on Friday as the dollar rose against the euro after Moody's threatened to cut Spain's credit rating, although bullion was supported by uncertainty about the US debt impasse after Republicans delayed a vote on a debt plan. Wheat, corn and soyabean futures have seesawed through July on production outlooks as US crops matured and weather remained a concern.
Corn for December delivery, the actively traded harvest month contract, lost 0.95 percent to $6.79 per bushel after shedding 0.5 percent on Thursday. Spot September corn was down 1.06 percent at $6.75. Although cooler weather in the US Midwest has helped crops recover from a heat wave last week, yields are likely to have been damaged.
"Over the next month or two any weather report that comes out is going to have a fairly large impact on prices because of the tight supply situation, particularly for corn," said Michael Creed, an agribusiness economist at National Australia Bank. Much of the US corn crop is pollinating or has just finished pollination, a critical period when mild weather and rain can be beneficial to yields.
BEARISH ON BALANCE Creed said wheat prices were being driven by the corn market, even though global supplies were ample apart from high-protein wheat, and he was bearish on the price outlook for the grain. "Across the commodities complex we are seeing a supply response (to high prices)," said Creed. "On balance I would be bearish about prices over the next six to 12 months," he said.
Wheat for September delivery fell 0.04 percent to $6.93 per bushel after falling 1.6 percent on Thursday on predictions of a smaller US spring wheat crop due to disease and soggy soils. Over the week the contract is heading for a 1 percent rise and a 20 percent gain through July although it is still down 12 percent for the year to date.
Creed said prices for grains such as wheat were likely to come under downward pressure when Russia and Ukraine start ramping up exports after a near year-long hiatus following a severe drought last year. Ukraine forecast a big rise in its 2011 grain crop and Russia announced record grain exports for July on Thursday, putting the Black Sea producers back on the front foot.
This month Russia has dominated tenders from key buyers such as top importer Egypt. The actively traded November soyabeans contract lost 0.26 percent to $13.68 per bushel, underpinned by milder weather in the US Midwest this week after being little changed on Thursday. For the week the contract is heading a for a rise of less than 1 percent while through July it is heading for a rise of around 6 percent. For the year to date the November contract has gained more than 5 percent.