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Corn backs down from 4-week top on U.S. harvest pace, strong dollar

09/28/2021 | 05:00pm EDT

CHICAGO, Sept 28 (Reuters) - U.S. corn futures fell more than 1% on Tuesday on macroeconomic worries as the dollar strengthened and crude oil futures turned down, and on harvest-related selling as combines rolled in the heart of the Midwest crop belt, analysts said.

Soybeans and wheat followed the weak trend.

Chicago Board of Trade December corn settled down 7 cents at $5.32-1/2 per bushel, turning lower after a climb to $5.41-3/4, its highest since Aug. 31.

November soybeans ended down 10-1/2 cents at $12.77 a bushel and CBOT December wheat fell 15-3/4 to settle at $7.06-1/2 a bushel.

"We've got a risk-off climate. You see it in the energies, and it's spilling over into the grains. The dollar is substantially stronger... That's got pressure on commodities as a whole," said Ted Seifried, chief ag market strategist for Zaner Ag Hedge Group.

The U.S. dollar index hit its highest level since early November as a rise in Treasury yields made the greenback more attractive to investors. A firmer dollar also tends to make U.S. grains less attractive to those holding other currencies.

U.S. crude oil futures turned lower after hitting their highest since July.

Meanwhile, the Midwest harvest is under way, adding seasonal pressure. The U.S. Department of Agriculture (USDA) said 18% of the nation's corn had been cut as of Sunday along with 16% of the soybean crop, both slightly ahead of their respective five-year averages.

CBOT oat futures hit a 7-1/2 year high before retreating to close lower. December oats ended down 3-3/4 cents at $5.83-1/4 a bushel after a surge to $5.94-1/2, the highest in a continuous chart of front-month futures since March 2014. Oats have fundamental support from tight North American supplies following a summer drought in Canada, the world's top exporter.

"There's a serious shortage over the short term, and that is really underpinning the market," said Terry Reilly, senior analyst with Futures International in Chicago.

Traders are looking ahead to the USDA's Sept. 30 quarterly stocks and annual small grains reports. Analysts surveyed by Reuters on average expect the government to report U.S. Sept. 1 corn stocks at 1.155 billion bushels, below the 1.187 billion bushels that the USDA projected in its last monthly supply/demand report on Sept. 10.

Analysts on average pegged Sept. 1 soybean stocks at 174 million bushels, close to the 175 million bushels that the USDA projected on Sept. 10. (Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris; editing by Subhranshu Sahu, Mark Potter, Nick Macfie and Cynthia Osterman)

© Reuters 2021
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