Forexpros – Corn futures fell sharply on Wednesday, pulling back from the previous session’s one-week high as ongoing concerns over the euro zone’s debt crisis and worries about increasing competition for U.S. corn exports weighed.
On the Chicago Mercantile Exchange, corn futures for March delivery traded at USD5.9800 a bushel during European morning trade, dropping 1.1%.
It earlier fell by as much as 1.7% to trade at a daily low of USD5.9512 a bushel.
Agricultural commodities continued to be affected by outside influences after a meeting of euro zone finance ministers on Tuesday did little to reassure markets of progress in tackling the region’s debt crisis.
Euro zone finance ministers announced that they had agreed on terms for options to expand the European Financial Stability Facility, the region’s bailout fund.
However, markets were disappointed after they said its capacity to assist indebted nations would not be as large as initially hoped.
The downbeat news boosted demand for the safe haven U.S. dollar, with the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gaining 0.31% to trade at 79.39.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Corn prices came under additional pressure after industry research group ProAgro said that Ukraine’s monthly corn shipments could hit an all-time high in November, following the removal of an export tax in October.
Shipments of Ukrainian corn rose to 1.01 million metric tons in the first 18 days of November, up 84% from 422,700 tons during the same period a month earlier.
Ukraine is a major corn exporter and competes with the U.S. for business on the global market. A favorable export outlook could potentially weigh on demand for U.S. supplies, which is both the world’s largest corn producing nation and the world’s largest exporter of the grain.
Futures came off their lows after the world’s largest corn consumer China cut the reserve requirement ratio for its commercial lenders by 0.5% effective from December 5.
Elsewhere on the Chicago Mercantile Exchange, wheat for March delivery fell 1.35% to trade at USD6.0763 a bushel, while soybeans for January delivery dropped 1.12% to trade at USD11.1238 a bushel. 
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