By Luzi Ann Javier May 25 (Bloomberg) -- Corn, wheat and soybeans declined after the seizure of a Spanish bank stoked investor concern that Europe’s debt crisis may hurt the global recovery, strengthening the dollar and making U.S. crop supplies more expensive. Corn for July delivery fell for the first time in four sessions, dropping 1 percent to $3.6725 a bushel at 10:38 a.m. in Singapore. Wheat declined 0.8 percent to $4.6375 a bushel and soybeans lost 0.2 percent to $9.39 a bushel. The dollar gained for a second day against a basket of six major currencies after Spain’s central bank seized CajaSur, a savings bank in Cordoba that refused a merger plan. The International Monetary Fund urged Spain to do more overhaul ailing banks, spurring concern that financial institutions in the euro area face further losses. “We’ve seen risk aversion and U.S. grains have come under pressure,” Jonathan Barratt, managing director at Commodity Broking Services Pty. in Sydney, said by phone. “As a result of that, the bullish tone that we’ve had has taken a back seat.” Corn futures gained 4.2 percent in the five trading sessions to yesterday on speculation that imports by China, the second-largest consumer, may surge this year after drought cut last year’s output and snow delayed this year’s planting. The nation is forecast by the U.S. Department of Agriculture to consume 19 percent of global corn output. Cofco Comments China may require “large scale” imports of corn if the domestic harvest falls this year after the delayed planting, Fei Zhonghai, assistant to the general manager at state-owned Cofco Ltd. said yesterday. Cofco, China’s biggest grain trader, has already used its 500,000 ton corn-import quota this year. The State Administration of Grain pledged to use its stockpiles to curb domestic prices, Zeng Liying, a deputy at the body, said yesterday. Still, feed mills and other corn users are in talks to import 1.5 million tons, executives familiar with the matter said last week. Last year’s corn imports totaled 47,000 tons, according to the U.S. Department of Agriculture. “What’s happening with the climate, the weather in China is something that the market hasn’t really focused on,” Barratt said. “That could add to concerns.” Soybean output in China, the world’s largest buyer of the oilseed, fell 3.6 percent to 14.98 million tons last year, Cao Zhi, director at the China National Grain & Oils Information Center, said today at a conference, citing official statistics. Imports this year may exceed a forecast 46 million tons on higher demand for vegetable oil and animal feed, Cao said. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

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