GRAINS-Corn drops for 4th day as rains boost U.S. crop outlook

In Commodity News 24/06/2016

Chicago corn slid for a fourth session on Thursday with the market hitting its lowest in more than a month as widespread rains across the U.S. Midwest lifted crop prospects. Soybeans edged lower after firming in the last session on the back of strong demand, while wheat ticked up on support from concerns over Black Sea crops.

FUNDAMENTALS

* Storms rolled through the U.S. corn belt on Tuesday and Wednesday, easing concerns about dryness in some areas. With the crop still heading into its crucial pollination phase, which typically occurs in July in the Midwest, weather remained the focus.

* Thunderstorms were reported over parts of South Dakota, Missouri, Iowa and Illinois, bringing bursts of heavy rainfall totalling more than 2 inches per hour in spots.

* That triggered liquidation of long positions by investors. Commodity funds were net sellers of Chicago Board of Trade corn futures contracts on Wednesday and net buyers of soybean futures.

* Trade estimates of fund selling in corn ranged from 3,000 to 13,000 contracts, while estimates of net fund buying in soybeans ranged from 4,000 to 8,000 contracts.

* The soybean market was underpinned by demand for U.S. supplies. Firming CIF (cost, insurance and freight) premiums for soybeans at the U.S. Gulf export terminal fuelled talk of fresh business, in addition to sales confirmed on Tuesday by the U.S. Department of Agriculture.

* Soybean spot basis bids were higher at U.S. Midwest river terminals on Wednesday, with the basis extending the previous session’s steep gains on strong export demand and slow farmer sales.

* The wheat market drew support from worries about the quality of wheat crops in Russia and Ukraine.

* The rainy weather has reduced protein levels in Russian wheat and raised concerns over fungal disease while also reducing the proportion of milling wheat in Ukraine.

MARKET NEWS

* Asian shares edged up and sterling stood close to its peak for the year on Thursday, as investors were cautiously optimistic that British voters would opt to remain in the European Union at a referendum later in the session.

    DATA/EVENT AHEAD (GMT) 
Britain holds referendum on membership in European Union 
0700 France Markit manufacturing flash PMI Jun 
0700 France Markit services flash PMI Jun 
0730 Germany Markit manufacturing flash PMI Jun 
0730 Germany Markit services flash PMI Jun 
0800 Euro zone Markit manufacturing flash PMI Jun 
0800 Euro zone Markit services flash PMI Jun 
1230 U.S. Weekly jobless claims 
1230 U.S. National activity index May 
1345 U.S. Markit manufacturing flash PMI Jun 
1400 U.S. New home sales May 
1400 U.S. Leading index May
    
 Grains prices at  0114 GMT
 Contract    Last     Change  Pct chg  Two-day chg  MA 30    RSI
 CBOT wheat  459.25   0.50    +0.11%   +0.16%       479.66   30
 CBOT corn   390.75   -2.25   -0.57%   -1.39%       410.78   29
 CBOT soy    1114.50  -2.25   -0.20%   +0.34%       1103.92  48
 CBOT rice   10.98    $0.00   -0.05%   -1.13%       $11.44   33
 WTI crude   49.55    $0.42   +0.85%   +1.43%       $48.71   58
 Currencies                                                  
 Euro/dlr    $1.133   $0.003  +0.28%   +0.77%                
 USD/AUD     0.7520   0.002   +0.27%   +1.02%                
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 hundredweight
 RSI 14, exponential

Source: Reuters (Reporting by Naveen Thukral; Editing by Joseph Radford)