(Reuters) – U.S. soybeans, corn and wheat fell on Wednesday as grain harvests in the United States made rapid progress while the euro zone debt crisis sparked a stronger dollar, making U.S. wheat more expensive on global export markets.
Investors remained cautious ahead of the next U.S. Department of Agriculture (USDA) quarterly stocks report on Friday.
“We are seeing a very negative impact on grains today from broader outside markets with crude oil down and the dollar rising,” said Rabobank analyst Erin FitzPatrick. “We are also seeing rapid harvest progress in the U.S.”
“Although the harvest progress is not particularly bearish when you look at the firm cash markets and the overall tight supply outlook, it is currently putting overall weakness into grains futures.”
Chicago Board Of Trade November soybeans fell 1.1 percent to $15.93 a bushel at 1007 GMT, having closed up 0.1 percent on Tuesday.
Chicago December corn fell 1.1 percent to $7.35-1/2 a bushel after falling 0.1 percent on Tuesday, while December wheat fell 1.04 percent to $8.77-1/4 a bushel, having closed down 0.6 percent in the previous session.
European equities fell sharply on Wednesday as popular opposition within the euro zone to budget austerity measures unnerved investors already worried about a weak global growth outlook.
The euro hit a two-week low against the dollar, dragged down by uncertainty over when Spain might request a bailout and after anti-government protests in Madrid turned violent.
“We are not seeing any additional new bullish stories being fed into the grains markets to compensate for the negative macro issues at the moment,” FitzPatrick said.
U.S. soybean futures reached an all-time record of $17.94-3/4 a bushel in early September, after a scorching heatwave and drought ravaged U.S. crops following sharply lower harvests in South America.
But soybeans and corn have drifted down recently as the harvest in top exporter the United States progressed at a rapid pace. The USDA said on Monday the U.S. corn harvest was 39 percent complete on Sept. 23, up from 26 percent a week earlier. The soybean harvest was 22 percent complete, up from 10 percent.
“Soybeans are down on harvest pressure,” said Lynette Tan, analyst at Phillip Futures. “There are also concerns about the macro economy and the impact on global demand.”
EYES ON USDA REPORT, EGYPT TENDER
Traders were gearing up for Friday’s U.S. quarterly grain stocks and wheat crop reports which may provide new direction for markets.
“Everyone is pretty hesitant to make any moves ahead of the USDA grains stocks report on Friday,” FitzPatrick said. “The very fast progress being made with the U.S. corn harvest does raise questions about how this will impact the stocks report.”
Analysts polled by Reuters expect U.S. corn and soybean stocks as of Sept. 1 to be the lowest in eight years at the end of the 2011/12 season (Sept/Aug).
WHEAT EXTENDS LOSSES AS EGYPT TENDERS
Wheat fell for the third consecutive session following strong gains on Sept. 21 when one Russian minister said Russia may curb grain exports if domestic prices continue to firm.
Egypt’s state grains buyer GASC set a snap tender on Wednesday to buy wheat for Dec 1-10 shipment. The agency has heavily bought Russian wheat over the past month but Russian supplies are increasingly sold out.
U.S. wheat was thought to have little chance in the Egyptian tender, also a weakening factor for Chicago futures.
“When you add the shipping costs, French wheat seems to have an indisputable lead in the Egyptian market over the U.S. and Argentine rivals so people are expecting a big French sale to Egypt today,” one trader said. “But some Russian and Ukrainian supplies are still available and may well also get some of the action as we saw in Jordan yesterday.”
Russian grain was thought to have been sold to Jordan in a barley tender on Tuesday.
European benchmark November wheat in Paris was up 0.1 percent to 261.75 euros a tonne with export prospects supporting.
