Bloomberg News (Jan. 18, 2012) | U.S. corn, soybean and wheat futures fell on Wednesday as new forecasts predicted more rain in parts of the drought-hit South American grain belt. Weather in Argentina and Brazil remains at the forefront of concern in the global grains market and rains over the next few days could improve soybean and corn production prospects.
“I think the improvement in the Brazilian and Argentine weather models showing that there is some rain around is a weakening factor today,” said Rabobank analyst Nick Higgins.
This was pressuring U.S. soybeans and corn while wheat was suffering some knock-on downward pressure, he said.
“But the downside is limited by the weakness in the dollar today and also by belief that much of the damage to corn crops in South America is already done,” he said.
Chicago Board of Trade March soybeans fell 0.7 percent to $11.75 a bushel by 1150 GMT. Corn for March delivery fell 0.5 percent to $6.01 a bushel. March wheat lost 0.5 percent to $6.01-1/2 a bushel.
European wheat was also lower. The Paris March wheat contract, Europe’s benchmark, was down 0.8 percent at 198.25 euros a tonne.
“Despite improved precipitation in a lot of Brazil and Argentina it is not necessarily hitting the right areas,” Higgins said. “There is a bit of relief today but (it’s) not the end of the issue.”
For the next 10 days heavy rains will fall in Parana, Brazil’s No. 2 soybean growing state, soaking crops badly in need of moisture after a long drought, forecasters predicted on Tuesday, but no rain was headed for dry Rio Grande do Sul.