US grains: soy, wheat slide; industry in alert for corn toxin

US wheat fell slightly today after traders locked in profits following its biggest daily climb since mid-July in the previous session, although concerns that Russia is poised to implement export curbs continued to support prices.

Soybeans slid, giving back a third of gains made the day before, while corn was firm after toxin was found in some corn harvested in the United States.

The grain industry in the US is on alert for a naturally occurring toxin in corn that could present another challenge to farmers already hit by the worst drought in 56 years, although it is too early to tell how serious the problem might be.

Chicago Board Of Trade December wheat declined 0.2 percent to $9.04-1/4 a bushel after jumping 3.46 percent yesterday, its largest daily rise since July 16.

New-crop soybeans fell 0.33 percent to $17.47-1/4 a bushel after climbing 30-3/4 cents the day before, while December corn was 0.25 percent higher to $8.13-3/4 a bushel, having closed up 2.26 percent.

Wheat jumped yesterday as traders readied for a meeting of Russian government officials that could herald export curbs.

Russia recently cut its 2012/13 grain forecast to 75 million tonnes, with private forecasters pegging wheat output at below the 41.5 million tones harvested in 2010 when Moscow halted exports for almost a year.

The US Agriculture Department has cut its forecast for Russian wheat exports this year to 8 million tonnes from 12 million.

European milling wheat prices were also firm with the Paris-based benchmark November contract up 0.4 percent at 266.00 euros a tonne.

Trace amounts of aflatoxin have shown up in some of the corn harvested in the US, putting the grain industry, makers of milk products and crop insurers on high alert. Top U.S. dairy company Dean Foods in talks with state officials in Indiana and Iowa about testing milk for the carcinogenic byproduct of mold.

Any major outbreak has the potential to snarl the grain handling system in the U.S. Corn Belt and trigger a scramble - and price spike - for untainted corn which will already be in short supply this year due to the drought.

But with the corn harvest only 6 percent complete in the United States, the world's largest corn producer and exporter, it's too soon to know whether aflatoxin will be a significant issue.

Hurricane Isaac, since downgraded to a tropical storm, made landfall near New Orleans early yesterday, with updated weather maps forecasting heavy rain to spread inland over the next few days.

That is likely to stall the harvest of US crops, though it will add valuable soil moisture ahead of the autumn seeding of winter wheat.