Grain futures declined on Thursday, with corn retreating amid growing speculations that China, the second biggest importer, could probably reject more U.S. cargoes containing an unauthorized, genetically modified substance.
On the Chicago Board of Trade, corn for March delivery declined 0.96 percent to $4.3438 a bushel by 15:25 GMT. Futures held in a range between day’s high and low of $4.3888 and $4.3338 per bushel, respectively. On Tuesday, prices jumped to $4.4025 per bushel, the highest since October 25th. Corn added 2.26% last week following a gain of 0.38% in the preceding 5-day-period. Prices climbed 0.8 percent yesterday on signs of increasing demand for ethanol.
China announced on December 6th it had rejected US shipments which contained insect-resistant MIR 162 grain until they have its safety assessed. The USDA reported that about 3 million tons for export to China hadnt been expected for shipping as of November 28th. According to a separate report by the General Administration of Quality Supervision, Inspection and Quarantine nearly 180 000 tons, which contained the substance, had been rejected and returned.
“There is continued speculation that more U.S. corn cargoes have or will be rejected by the Chinese because of unapproved GMO strains,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, cited by Bloomberg.
The US Department of Agriculture reported on Tuesday that world corn output in the year beginning October 1st is projected to be 964.28 million metric tons, compared to a 962.83 million forecast in the previous month and up from last year’s 862.88 million metric tons. The agency added that at the end of the marketing year (August 31st), the US surplus may reach 1.792 billion bushels, down from 1.887 billion forecast in November, but well above last years 824 million bushels, which is 118% less than the projected US surplus for next year.
DTN’s December 11th forecast called for very cold weather to continue in the Midwest early this week before moderating somewhat. On Friday, more precipitation is expected, especially through southern and eastern areas. Winter wheat is likely well established through the Central and Southern Plains region at this time. However, recent very low temperatures may have been cold enough to harm some unprotected wheat in northeast Colorado and southwest Nebraska.
Wheat futures for settlement in March traded at $6.3350 per bushel at 15:26 GMT, losing 1.17% on daily basis. Prices jumped to a session high of $6.4250, while day’s low was touched at $6.3338 per bushel, the lowest since August 23rd. The grain lost 2.6% last week, snapping two five-day periods of advances of 3.0% and 0.82%, respectively.
Soybeans down as well
Soybeans futures for settlement in January traded at $13.3313 per bushel at 15:27 GMT, losing 0.75% on a daily basis. Prices swung between day’s high and low of $13.4412 and $13.3462 per bushel. The oilseed lost 0.85% last week after gaining 1.34% in the preceding one. On Tuesday, soybeans reached $13.5338, the strongest level since September 19th.
The USDA reported that global soybeans production is projected to reach a record high of 284.94 million tons, compared with a 283.54 million forecast in November and up from 268.02 million a year earlier.
DTN’s forecast called for dry, hot weather in the region from central Argentina to southern Brazil, which is favorable after the recent rains. However, if the pattern continues, it would become more stressful for crops. Thunderstorms and rain that occurred early this week in Brazil will maintain favorable soil moisture for earlier-planted crops while delaying the harvest effort for winter wheat and the final planting effort for soybeans.