Corn falls from six-week peak, bumper production drags

In Commodity News 04/02/2016

U.S. corn edged lower on Wednesday to give back much of its gains from the previous session when prices hit a six-week peak, as ample global supply offset support from short-covering.

FUNDAMENTALS

* Chicago Board of Trade front-month corn fell 0.27 percent to $3.71-1/2 a bushel, having gained 0.34 percent in the previous session when prices marked a six-week top of $3.73-3/4.

* Front-month wheat rose 0.1 percent to $4.75-3/4 a bushel, after closing little changed on Tuesday when prices hit a near one-week high of $4.83 a bushel.

* Front-month soybeans fell 0.4 percent to $8.82-3/4 a bushel, after ending down 0.4 percent on Tuesday.

* Rattled by stringent new import rules, Egypt’s wheat suppliers boycotted en masse a state tender on Tuesday, pushing the world’s biggest purchaser of the commodity towards a crisis that could threaten its strategic grain reserves.

* GASC rejected a 63,000-tonne wheat shipment this week for containing traces of ergot. GASC on Tuesday said it was in talks to import 3 million tonnes of wheat outside the tendering process.

MARKET NEWS

* The yen and euro held on to overnight gains against the dollar on Wednesday after a sharp slide in crude oil prices fuelled risk aversion, driving down U.S. debt yields to 9-month lows and dulling the greenback’s appeal.

* U.S. oil futures extended losses into a third session in early Asian trade on Wednesday as U.S. crude stocks last week surged to more than half a billion barrels, stoking concern over global oversupply.

* U.S. stocks dropped on Tuesday after another steep fall in oil prices and a disappointing spending forecast from Exxon Mobil.

DATA AHEAD (GMT)

0145  China          Caixin services PMI              Jan 
0855  Germany        Markit services PMI              Jan 

1000  Euro zone      Retail sales                     Dec 
0900  Euro zone      Markit services PMI              Jan 
1315  U.S.           ADP national employment          Jan 

1500  U.S.           ISM non-manufacturing PMI        Jan

Grains prices at 0137 GMT

  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
CBOT wheat     475.75     0.50  +0.11%    +0.11%     472.89   48

  CBOT soy       883.00    -3.25  -0.37%    +0.26%     874.11   51
CBOT corn      371.50    -1.00  -0.27%    +0.07%     363.33   59
  CBOT rice      $11.12   -$0.05  -0.49%    -2.03%     $11.33   52

  Euro/dlr       $1.093   $0.002  +0.14%    +0.41%
WTI crude      $29.44   -$0.44  -1.47%    -6.89%     $32.98   39
  Currencies                                                

  USD/AUD         0.701   -0.003  -0.41%    -1.42%

Most active contracts

Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight

RSI 14, exponential

Source: Reuters (Reporting by Colin Packham; Editing by Joseph Radford)