Wednesday, October 27

Corn eases from 4-week top on US harvest pace, stronger dollar


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CHICAGO — US corn futures were down about 1% on Tuesday on macroeconomic worries as the dollar strengthened and crude oil futures turned down, and on harvest-related selling as combined rolled in the heart of the Midwest, analysts said.

Soybeans and wheat followed the weak trend.

As of 12:55 pm CDT (1755 GMT), Chicago Board of Trade December corn was down 5-3/4 cents at $5.33-3/4 per bushel, turning lower after a climb to $5.41-3/4, its highest since Aug. 31.

November soybeans were down 10-3/4 cents at $12.76-3/4 a bushel and CBOT December wheat was down 12-1/2 cents at $7.09-3/4 a bushel.

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“We’ve got a risk-off climate. You see it in the energies, and it’s spilling over into the grains. The dollar is substantially stronger… That’s got pressure on commodities as a whole,” said Ted Seifried, chief ag market strategist for Zaner Ag Hedge Group.

The US dollar index hit its highest level since early November as a rise in Treasury yields made the greenback more attractive to investors. A firmer dollar also tends to make US grains less attractive to those holding other currencies.

US crude oil futures turned lower after hitting their highest since July.

Meanwhile, the Midwest harvest is under way, adding seasonal pressure. The US Department of Agriculture (USDA) said 18% of the nation’s corn had been cut as of Sunday along with 16% of the soybean crop, both slightly ahead of the five- year averages of 15% and 13%, respectively.

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“Demand for grains is still very strong, and the US harvest has picked up,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney. “There is likely to be a bit of harvest pressure starting to show up.”

Through its daily reporting system, the USDA confirmed private sales of 150,000 tonnes of US corn to Mexico.

Traders are looking ahead to the USDA’s Sept. 30 quarterly stocks report. Analysts surveyed by Reuters on average expect the government to report US Sept. 1 corn stocks at 1.155 billion bushels, below the 1.187 billion bushels that the USDA projected in its last monthly supply /demand report on Sept. 10.

Analysts on average pegged Sept. 1 soybean stocks at 174 million bushels, close to the 175 million bushels that the USDA projected on Sept. 10. (Additional reporting by Naveen Thukral in SIngapore and Sybille de La Hamaide in Paris; editing by Subhranshu Sahu, Mark Potter and Nick Macfie)

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