SYDNEY, Sept 12: U.S. Corn edged higher on Wednesday, rebounding from two straight sessions of losses, with investors cautious ahead of the U.S. Department of Agriculture supply and demand report later in the day.
Soybeans were unchanged, having hit a three-week low in the previous session.
FUNDAMENTALS
Chicago Board of Trade December corn rose 0.19 percent to $7.79-1/4 a bushel, having closed down 0.7 percent on Tuesday.
December wheat rose 0.08 percent to $8.84-1/2 a bushel after closing 0.67 percent lower in the previous session.
New-crop soybeans were flat at $17.01-3/4 a bushel after finishing down 0.97 percent.
Funds have been liquidating bullish bets in the markets heading into U.S. Department of Agriculture supply-demand and crop production reports due on Wednesday. Investors are uncertain about the extent of crop damage the reports will show from the worst U.S. Drought in more than half a century.
Concerned about tightening supplies, French President Francois Hollande on Tuesday proposed the creation of strategic stockpiles of agricultural commodities to prevent extreme price swings on international markets.
Analysts polled by Reuters predict the USDA report will show the drought has slashed nearly 5.0 billion bushels from the corn crop, or about $40 billion worth at current prices.
Analysts predict USDA will trim its soybeans crop forecast to 2.657 billion bushels from 2.692 billion in August. However, some expect a slight increase from the August figure because of beneficial Midwest rains last month.
The USDA’s first update on this year’s soybean harvest on Monday showed the crop was 4 percent harvested, which topped the five-year average of 2 percent and expectations for 3 percent harvested.
The USDA also said the condition of soy plants had improved, reinforcing market sentiment that parts of the Midwest benefited from rain last month.
The corn harvest was 15 percent complete, above the five-year average of 5 percent.
Egypt, the world’s top wheat importer, bought 235,000 tonnes of wheat from Ukraine, Russia and France on Tuesday.
Australia, another key wheat exporter, cut its forecast for wheat production in the 2012/13 crop marketing year by about 7 percent from its previous forecast to 22.5 million tonnes due to dryness.
MARKET NEWS
The euro dropped against the dollar for the first time in four days on Monday, a direction that could prove to be transitory given elevated expectations that the U.S. Federal Reserve will unveil new stimulus measures to bolster the economy this week.
Oil prices rose on Tuesday in choppy trading as expectations that the U.S. Federal Reserve will act to bolster the economy and that a German court will approve a euro zone rescue plan put pressure on the dollar and boosted crude futures.
The Dow industrials closed at the highest level in nearly five years on Tuesday in a lightly traded session before key decisions in Germany and the United States that could give markets a further boost.(agencies)
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