Forexpros – U.S. grain futures were mostly higher during European morning trade on Thursday, with wheat and corn prices firming on the back of adverse weather conditions across key growing regions in Australia and the U.S.
Meanwhile, soybean prices came under pressure for a second day amid concerns over a deeper-than-expected slowdown top consumer China.
Grain traders continued to monitor rising borrowing costs in Spain and Italy, as well as weekend elections in Greece, which could determine the course of the country’s future in the euro zone.
On the Chicago Mercantile Exchange, corn futures for July delivery traded at USD5.9838 a bushel, gaining 0.9%. It earlier rose by as much 1.1% to trade at a session high of USD5.9988 a bushel.
Corn prices rose amid concerns that dry soil in the U.S. corn-belt could strain the development of crops in the region.
Futures found further support after Wall Street investment firm Goldman Sachs said in a report Wednesday that it sees corn prices soaring back to USD6.90 a bushel this summer.
“The downside to current new-crop prices is limited given ongoing dry weather conditions in the U.S., with the USDA reporting [a] lower crop conditions rating,” the bank said in a report.
The U.S. produced 38% of the world’s corn last year, making it the both world’s largest corn producing nation and the largest exporter of the grain.
Elsewhere, wheat for July delivery traded at USD6.1925 a bushel, gaining 0.45%. It earlier rose by as much as 0.65% to trade at a daily high of USD6.2088 a bushel.
Wheat prices continued to draw support from concerns over declining production in Australia, the world’s second largest shipper of the grain.
The Australian Bureau of Agricultural and Resource Economics and Sciences said Wednesday that production may reach 24.1 million metric tons in 2012-13 season, 6.2% below the 25.7 million tons estimated in March and the lowest level since 2009-10 marketing year.
Meanwhile, soybeans futures for July delivery traded at USD13.9838 a bushel, slumping 0.65%. It earlier fell by as much as 1.3% to trade at USD13.9225, the lowest since June 7.
Soybeans came under pressure amid concerns a slower-than-expected economic expansion in China, the world’s largest importer of soybeans will weigh on demand.
Credit Suisse and Deutsche Bank both reduced forecasts for China’s growth this year as weakness in exports and in investment drag on the world’s second biggest economy.
Credit Suisse reduced its estimate to 7.7% from 8%, while Deutsche Bank lowered its forecast to 7.9% from 8.2%. The predictions indicate the weakest growth since 1999 and compare with a 9.2% expansion last year.
China is the world’s largest soybean consumer and is expected to account for nearly 60% of global trade of the grain in the 2011-12 season, according to the U.S. Department of Agriculture.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.