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Grains futures mixed as investors look ahead to USDA supply report

Published 01/08/2013, 06:04 AM
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Investing.com - U.S. grain futures were mixed during European morning hours on Tuesday, as investors looked ahead to the U.S. Department of Agriculture’s key monthly report on U.S. and global grain supplies later in the week.

Market players also continued to closely monitor weather conditions in major South American growers Brazil and Argentina.

The USDA will release its updated supply and demand and crop production reports on Friday, January 11.

On the Chicago Mercantile Exchange, soybeans futures for March delivery traded at USD13.8250 a bushel, shedding 0.4% on the day. The March contract fell by as much as 0.6% earlier in the session to hit a daily low of USD13.8075 a bushel.

Soy prices fell to a low of USD13.5612 a bushel on January 4, the cheapest level since June 6.

Meanwhile, corn futures for March delivery traded at USD6.8588 a bushel, little changed on the day.

The March contract held in a tight range between USD6.8388 a bushel, the daily low and a session high of USD6.8812 a bushel. Corn futures fell to USD6.7988 a bushel on January 4, the lowest level since July 2.

Corn and soy traders continued to monitor crop conditions in Argentina and Brazil, major South American growers. The countries will harvest their crops during the next three to four months.

The USDA will update its South American crop forecasts in its January crop report on Friday.

The data could show Argentina’s soybean harvest fell to 54.6 million tons, compared with USDA’s previous outlook of 55 million tons.

The nation’s corn crop will probably reach 25.9 million metric tons, smaller than the 27.5 million tons forecast by the USDA last month.

In Brazil, the soybean crop may reach 81.9 million tons, compared to the USDA’s forecast for 81 million tons in December.

The corn crop in Brazil will probably total 70.4 million tons, above the 70 million tons estimated by the USDA in December.

Corn prices have lost almost 10% since the start of December, as worries over slowing overseas demand for supplies from the U.S. have weighed on sentiment.

Elsewhere, wheat for March delivery traded at USD7.5375 a bushel, up 0.35% on the day. The March contract rose by as much as 0.6% earlier in the session to hit a daily high of USD7.5562 a bushel.

Wheat prices fell to USD7.3988 a bushel on January 4, the weakest level since July 2.

U.S. wheat stockpiles before the 2013 harvest could fall to 741 million bushels, down from a previous USDA estimate of 754 million.

Wheat prices have been under heavy selling pressure in recent weeks, losing nearly 13% since the beginning of December, as technical selling and concerns over poor export demand weighed on sentiment.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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