Chicago grain futures plunge on bearish outside market

Chicago corn futures retreated the most since May 17 on Tuesday, soybean price touched a 10-week low, and wheat once hit the lowest price in seven months, as investors worried that the widening eurozone debt crisis would mute the vigor of global economic recovery and erode demand for raw commodities such as grain and metal.

Soybean futures for July delivery was down 10.0 cents, or 1.1 percent, to settle at 9.305 U.S. dollars per bushel. July corn dropped 6.75 cents, or 1.8 percent, to 3.6425 dollars a bushel. July wheat dipped 7.0 cents, or 1.5 percent, to 4.605 dollars a bushel.

The Central Bank of Spain announced over the weekend its move to take over a local saving bank, and four Spanish saving banks declared their plan to combine, which underpinned investors' concern that the Greek debt crisis and its spillover effect may stifle European economic growth for a prolonged period of time and may also hamper global economic recovery.

Meanwhile, the escalating tensions on the Korea Peninsula also fueled investors' risk aversion, which triggered a major sell-off in commodity market. The strong rally in dollar, the drop in crude oil prices and the sharp break in equity market all contributed to set the weak tone for grain futures.

USDA said in a report on Monday that 93 percent of the corn crop was planted as of May 23, up from 80 percent a year earlier. Meanwhile, 53 percent of soybean planting was completed, up from 44 percent last year.

Trader noted that the recent weather pattern has kept corn crop condition ratings near historical levels, which almost guaranteed a record yield this year and kept a lid on corn price.

Source:Xinhua