GRAINS-Corn falls to new low after China cancellations

(Recasts with Informa forecast, adds analyst quotes; changes
byline, dateline, previous SYDNEY/PARIS)
    By Michael Hirtzer
    CHICAGO, Jan 3 (Reuters) - U.S. corn futures declined the
fourth straight session on Friday, with the most active contract
notching a new low, after China canceled more shipments of U.S.
supplies because they contained an unapproved strain of
genetically modified grain, analysts and traders said.
    Soybean futures also turned lower after earlier trading in
positive territory at the Chicago Board of Trade following the
release of Informa Economics crop estimates that lifted U.S.
yields for both corn and soybeans. "Corn is basically dead in the water - there's not a lot to support corn," said Karl Setzer, an analyst at MaxYield Cooperative in West Bend, Iowa. China, the No. 3 importer of U.S. corn after Japan and Mexico, has canceled numerous cargoes of U.S. grain since mid-November after they were found to contain Syngenta AG's MIR 162 corn, a GMO variety not approved for import by China. The U.S. Agriculture Department in its weekly export sales released early on Friday showed net a cancellation of 116,000 tonnes of corn to China. Informa Economics, in a forecast released at midday, lifted its estimate for last year's U.S. corn yield even as the closely watched analytics firm reduced its corn production estimate. CBOT March corn was down 2-1/2 cents at $4.18 per bushel after earlier hitting a contract low of $4.17. Most-active March soybeans were down 2-1/2 cents at $12.67-1/2 as of 11:18 a.m. CST (1718 GMT). Soybeans rallied earlier Friday following better-than-expected export sales results. "I don't know if the low total for corn is that much of a surprise considering the holiday timing. It was more of a
surprise that we had as good as bean sales as we did," said Terry Linn, an analyst with the Linn Group. Some traders were evening positions ahead of next week's monthly USDA report, when the government will release final production estimates of the 2013/14 U.S. corn and soybean crops. CBOT March wheat futures were up 3-1/4 cents at $6.00-1/4 per bushel, rebounding after hitting the lowest level since May 2012 in the previous session. Wheat was supported by bitterly cold U.S. temperatures that could damage the dormant crop. Temperatures in the U.S. Midwest crop belt are expected to fall to the coldest levels in years early next week, complicating barge traffic on icy rivers, but the region's soft red winter wheat should be protected from harm by a blanket of snow, forecasters said on Friday. Traders were also awaiting tender results from Egypt's main wheat-buying agency, the General Authority for Supply Commodities, which set tenders on Thursday to buy an unspecified amount of wheat from global suppliers for two shipment periods, Jan. 21-31 and Feb. 1-10. Competition is likely to be stiff between U.S. (currently the cheapest), French and Black Sea origins although it was
unclear yet whether the latter was being offered, traders said. In South America, meteorologists said much of Argentina has seen 0.5 to 1.5 inch (1.3 to 3.8 cm) of rain in the past week, easing fears that an expected bumper soy crop would fail to materialize. Prices at 11:18 a.m. CST (1718 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 418.00 -2.50 -0.6% -0.9% CBOT soy 1267.50 -2.50 -0.2% -3.4% CBOT meal 422.30 -1.50 -0.4% -3.5% CBOT soyoil 38.35 -0.16 -0.4% -1.2% CBOT wheat 600.25 3.25 0.5% -0.8% CBOT rice 1581.00 3.50 0.2% 1.9% EU wheat 208.00 0.00 0.0% -0.5% US crude 94.45 -0.99 -1.0% -4.0% Dow Jones 16,455 13 0.1% -0.7% Gold 1236.34 11.83 1.0% 2.6% Euro/dollar 1.3595 -0.0075 -0.5% -0.4% Dollar Index 80.7940 0.1640 0.2% 0.9% Baltic Freight 2036 -77 -3.6% -10.6% (Additional reporting by Julie Ingwersen, Christine Stebbins and Karl Plume in Chicago, Colin Packham in Sydney, and Valerie Parent and Michel Rose in Paris; Editing by Jason Neely and Meredith Mazzilli)

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