News
23.10.2009
Corn, Wheat Decline as Investors Lock in Gains on Price Jump
Corn fell from the highest in almost four months, and wheat and soybeans declined, on speculation some investors may be locking in gains after yesterday’s jump.
Corn jumped to the highest since June 29 in Chicago yesterday and wheat soared as much as 6 percent, while soybeans losed 2.5 percent higher as the dollar weakened against a basket f six major currencies, making U.S. supplies more attractive to investors and importers.
“The sharp gains that we saw are certainly contributing to potential consolidation today,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia in Sydney said by phone. Still, further weakening of the dollar and an advance in crude oil futures may help the grain and oilseed market extend gains, he said.
Corn for December delivery fell as much as 1.1 percent to $3.94 a bushel in after-hours electronic trading on the Chicago Board of Trade. It traded at $3.95 a bushel, down 0.8 percent at 2:33 p.m. Singapore time.
January-delivery soybeans declined as much as 1 percent to $9.9975 a bushel in Chicago, after rising as much as 3.2 percent to the highest level for the most-active contract since Aug. 31 yesterday. It last traded at $10.01.
Wheat for December delivery traded at $5.355 a bushel, down 1.3 percent at 2:44 p.m. Singapore time, after rising to the highest price for the most-active contract since Aug. 6 yesterday.
Dollar Falls
The Dollar Index, which tracks the value of the greenback against the currencies of six major U.S. trading partners, rose 0.4 percent to 75.298, after falling to the lowest level since August 2008 yesterday. The dollar weakened as evidence of a global economic recovery increased demand for riskier assets at the expense of the greenback.
Crude oil for December delivery fell 1 percent to $80.61 a barrel in after-hours electronic trading in New York, after closing 2.8 percent higher yesterday when the U.S. Department of Energy released a report showing gasoline supplies fell faster than forecast.
Wheat futures may rise to $5.50 a bushel by mid-2010 as global wheat plantings decline, curbing supply, Rabobank Group said in a statement e-mailed today.
“There are increasingly positive signs that we will see some upside for prices in the 2010-2011 as production around the world is adjusted downwards with growers responding to the current lower price signals, resulting in reduced supply,” Luke Chandler, global head of agricultural markets research at Rabobank in London said in the statement.
Wheat futures have fallen 12.2 percent this year after global supply gained as record prices last year encouraged growers around the world to increase production.
Bloomberg
