Grain futures drift lower before release of USDA crop report

09 December 2010 21:59  [Source: ICIS news]

HOUSTON (ICIS)--Futures prices for US corn, soybeans and other crops drifted softly downward at the Chicago Mercantile Exchange on Thursday, ahead of the US Department of Agriculture’s (USDA) monthly crop production and supply and demand data to be released on Friday.

Commodity traders were on “pins and needles” ahead of the report, an analyst said, with the trade expecting the USDA would report tighter supplies of corn and soybeans as well as a slight reduction in the size of the 2010 crops.

In a globally tight market for grains, any further tightening reported by the USDA would have dramatic effects on market prices.

Higher prices for corn, soybeans and other crops triggered by the USDA’s report would have a positive effect on farm income, and it would support stronger markets for ammonia and other fertilizers.

Those higher prices would also tend to narrow margins for US ethanol and biodiesel producers.

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By: Frank Zaworski
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