Corn futures sharply pare losses on export hopes...
Corn futures tumbled to six-year lows - only to recover on the news that the Brazilian government is working to open up its livestock feed sector to genetically modified corn from the US.
Corn had a weak start to the session, after weekly US Department of Agriculture overnight reported better-than-expected US crop ratings.
The USDA saw corn condition at 76% good or excellent, despite the hot weather, where markets were expecting at 1 point drop in condition.And the development of corn is well advanced, having got through the crucial month of July with no severe heat damage, with 91% of corn in the silking stage.Favourable crop outlook.Meteorologist Gail Martell said the good crop condition, and a benign weather outlook "points to a favourable corn harvest in the making."Summer growing conditions in corn have been mostly favourable, though not ideal."Rainfall has been ample, promoting strong growth and development in corn," she said, although some periods of heat have "proved detrimental".But the warm June temperatures, along with ample rainfall, "has spurred corn development," Ms Martell said.The prospect of ample US supply pushed December corn futures to session lows of just $3.29 a bushel, the lowest level for second-month futures since late 2009, but prices pared losses later in the session.Brazilian demand
Rich Nelson, at the US broker Allendale, ascribed the change in mood to "a new story out there".
This was an announcement by the Brazilian government that it was working to allow the import of more varieties of genetically modified US corn, for use in the country's livestock industry.
Shipping corn to Brazil, the world's second ranked corn exporter, during the middle of its' second crop, or safrinha, harvest might seem like sending coals to Newcastle.
But a crisis in corn supplies is developing in Brazil's southern livestock regions, sending prices soaring.A long period during which the currency was very weak, making Brazilian corn highly competitive in international markets, lead to heavy exports.Brazilian stocks were depleted, and much of the current crop was forward sold.Now, with estimates of the safrinha crop ever declining, the corn supply is getting very tight....
...Wheat extends losses to 10-year low
But Chicago wheat markets plumbed a fresh 10-year low, under pressure from the weight of world supplies.
Adding to the bearish tone was the news out overnight that Japan and Korea had both taken steps to restrict US imports, due to concerns over unapproved genetically modified wheat verities.
And Gasc, the stat grain buyer for Egypt, appears to have curtailed its buying in Tuesday's tender, taking just one 60,000 tonne cargo, of Russian wheat.