US corn futures fell for a third consecutive session on Monday, bringing cumulative losses to 4 per cent, on concerns China could reject more US corn and hamper efforts to shift a record-large US harvest.
Wheat extended a slide to fresh contract lows as weakness in corn and rising global wheat supply continued to dampen sentiment.
Soybeans eased as Friday’s rebound from a one-week low failed to carry over.
China has already rejected three cargoes of US corn because of an unapproved genetically modified (GMO) variety and now US exporters are concerned shipments of dried distillers’ grains, a corn byproduct, may be rejected for the same reason, trade sources said.
“The same issue is pressuring the US corn market and that is the fear that China would continue rejecting US cargoes of corn after the discovery of an unapproved genetically modified strain,” said Vanessa Tan, investment analyst at Phillip Futures in Singapore.
China’s strict checks for an unapproved strain of GMO corn in US cargoes are likely to continue until early next year as Beijing seeks to curb cheap imports and support domestic corn prices, industry sources said on Friday.
“The key factor for the price trend will come from the revision or not of Chinese imports, currently forecast at 7 million tonnes,” French consultancy Agritel said, referring to a
US government estimate of 2013/14 Chinese corn imports.
Chicago Board of Trade March corn fell 1.0 per cent to $4.21-1/4 a bushel, bringing its three-day losses to 4 per cent. It was just off an earlier two-week low of $4.21.
Adding to pressure on corn is a proposal last week by a group of US Senators to abolish a mandate for ethanol, the alternative fuel that absorbs a large amount of the US corn harvest.
Wheat and soybeans slipped as the crops also showed pressure from rising global supply.
CBOT March wheat was down 0.7 per cent at $6.24-1/4, just off an earlier contract low of $6.24. January soybeans fell 0.4 per cent to $13.22-3/4 a bushel.
The US Department of Agriculture last week raised its outlook for global wheat inventories by 4.3 million tonnes to 182.78 million, above market expectations of 179.11 million
Soybeans have found support in relatively tight US stocks but the prospect of bumper South American crops early in 2014 has eroded bullish sentiment.
“Now prices must find a new equilibrium that adequately grows demand while discouraging additional global plantings in 14/15,” Morgan Stanley analysts said of grain markets”.
(Source – http://www.blackseagrain.net/novosti/corn-slips-again-on-china-new-contract-lows-for-wheat)