Chicago wheat, soybeans tumble while corn further rises

CHICAGO, March 5 (Xinhua) -- Chicago wheat and soybeans tumbled on Monday amid concerns over demand from China as well as an upward adjustment of U.S. crop production and inventory while corn further climbed, gaining strength from a weak U.S. dollar and positive demand news.

The most active corn contract for May delivery climbed 5.75 cents, or 0.9 percent, to close at 6.6075 U.S. dollars per bushel. May wheat declined 2.5 cents, or 0.37 percent, to 6.72 dollars per bushel. May soybean dropped eight cents, or 0.6 percent, to close at 13.25 dollars per bushel.

Market analysts said that both wheat and soybeans declined after China, the world's major grain buyer, cut its economic growth expectation for the first time in eight years. China cut its 2012 growth target to 7.5 percent from eight percent, but kept its inflation target unchanged at four percent.

Meanwhile, Food and Agriculture Policy Research Institute, a think tank of University of Missouri, on Monday unveiled its estimates of U.S. crop production and stock, showing the numbers of wheat and soybeans are higher than the expectation of U.S. Department of Agriculture, which added to the negative tone.

The institute pegged the 2012/2013 wheat production at 2.239 billion bushels, up 74 million from the U.S. Department of Agriculture (USDA)'s estimate. Ending stocks of wheat are lifted at 966 million bushels from 845 million this year. It pegged the U. S. soybean ending stocks at 301 million bushels, up 96 million from the USDA's 205 million.

Besides, soybeans were weighed on by favorable weather for harvest in South America, talk of the overbought condition of the market and some liquidation of soybean/corn spreads.

However, Chicago corn gained strength from a weaker U.S. dollar. The Dollar Index, which measures the value of dollar against six other currencies, Monday shed 0.07 percent to 79.351. Meanwhile, Israeli private buyers tendered for 50,000 metric tons of corn in the day, giving additional support to corn.

According to Food and Agriculture Policy Research Institute's forecast, U.S. 2012/2013 corn production would reach 13.916 billion bushels, down 354 million from the USDA's estimate. Ending stocks are pegged at 1.346 billion bushels, as compared with USDA's 1.616 billion.

Source: Xinhua