Agricultural commodities fall further with higher dollar

Chicago corn, wheat and soybean futures all fell for the second straight session Monday, as commodities in general saw selloffs on the day, and a stronger U.S. dollar and mixed export data pressured trading. The most active corn contract for December delivery sharply fell 15.5 cents, or 2.06 percent, to close at 7.3725 dollars per bushel. December wheat lost 8.5 cents, or 0.99 percent, to settle at 8.4825 dollars per bushel. November soybeans sank 30 cents, or 1.97 percent, to close at 14.925 dollars per bushel. Outside market conditions were mixed Monday, as the session saw a steep loss in key commodity gold, as well as a lower daily settlement for crude oil. Though U.S. equities saw strong gains, uncertainty about the eurozone led investors to the U.S. dollar as a safe haven. The higher greenback pressured agricultural commodities, as it makes them more expensive to holders of other currencies. Agricultural commodities fell in line with these adverse market forces, additionally troubled by developments in their individual markets. Corn saw the sharpest loss on the day, once again falling below 7.5 dollars a bushel. Pressuring the corn market most was news that the U.S. livestock industry bought 600,000 tonnes of corn from Argentina, demonstrating the weak demand for the U.S. corn crop. Although 24.7 million bushels are necessary to meet the U.S. Department of Agriculture's (USDA) yearly corn forecast, weekly corn inspections were only pegged at 17.2 million bushels this week, showing the extent of the demand problem. Wheat also closed below the key 8.5 dollars a bushel trading level, likewise hampered by poor export data. Weekly wheat inspections registered at seven million bushels, a far cry from the 24.75 million bushels necessary to meet the USDA wheat forecast. However, wheat could see some underlying support from ideas of lower world wheat production due to the year's poor weather conditions. Supporting this prediction was news Monday that the United Kingdom's Farm Ministry revised down national wheat production to 13.31 million tonnes, which would be a 12.8 percent decrease from UK wheat production last year. At 57.8 million bushels, weekly soybean export inspections were stronger than expected, as only 20 million bushels are required each week to meet the USDA soybean forecast. Despite the strong export sales, soybeans fell sharply on the session to close below 15 dollars a bushel. Instead of the export support, traders seized upon news of good weather forecasts in South America, and engaged in some long liquidation selling. The National Oilseed Processors Association release of September soybean crush also could have led to some declines in the soybean market. While the crush of 119.7 million bushels came in around market expectations, it was below the August crush of 127.7 million bushels.