CHICAGO, Feb 1 (Reuters) - U.S. corn
and wheat futures fell on Friday and soybeans trimmed gains after reaching a
six-week high as forecasts showed dry areas of major exporter Argentina are in
line to receive favourable rains.
Northern crop areas of the world's
No. 2 corn exporter and third largest soybean supplier are set to receive more
rain than previously expected during the weekend, said Andy Karst,
meteorologist for World Weather Inc. The rain "would be notable if it happened"
after weeks of recent dryness, he said.
The markets retreated on the outlook
after rising in earlier trading on worries about lighter-than-expected rains
that fell on Thursday.
Traders are focusing on the weather
because farmers in South America need to produce large crops to meet strong
demand from top soybean importer China and compensate for a drought-reduced
U.S. harvest last year .
Traders broadly expect large
harvests in South America in the coming months, but every twist in the weather
is being scrutinized amid tight global supplies.
Conditions look "a little bit
wetter in the northern fringe of the corn and soybean belt," said Jim
Gerlach, president of A/C Trading.
Chicago Board of Trade March March
corn dipped 0.6 percent to $7.36 a bushel, while
March wheat
slid 1.8 percent to $7.65 a bushel. March
soybeans ended up 0.4 percent at $14.74-1/4 a bushel
after touching a six-week high of $14.86-1/2 a bushel earlier in the session.
ARGENTINA VS. BRAZIL
With traders focused on South
America, Informa Economics, a closely watched crop forecaster, cut its estimate
for Argentina's soybean harvest by 6.7 percent to 54.5 million tonnes and its
estimate for the corn harvest by 7.4 percent to 25 million tonnes.
However, the firm increased its estimate
for Brazil's soybean harvest 6.2 percent to 70.3 million and its outlook for
Brazil's corn harvest 1.3 percent to 84.0 million.
The U.S. Department of Agriculture
last pegged Argentina's soybean crop at 54 million tonnes and the corn crop at
28 million tonnes. The department estimated Brazil's soybean crop at 82.5
million and its corn crop at 71 million.
The USDA will update its crop
forecasts next Friday in a monthly global supply and demand report.
