BLBG:Corn Declines on Speculation Demand May Slow; Soybeans, Wheat Steady
Corn fell for the first time in five sessions on speculation that demand will slow for grain used in animal feed, fuel and food after prices rose last week. Soybeans and wheat were little changed.
Corn touched an 11-week high on Aug. 29 on signs that hot, dry weather in the U.S. will cut crop yields. The U.S. Department of Agriculture reported on Aug. 29 that the amount of U.S. corn inspected for export in the week ended Aug. 25 dropped 15 percent from a week earlier.
“The past two weeks or so, traders have been pricing in lower yields, so it’s no big surprise,” Frank Cholly Sr., a senior market strategist at MF Global Holdings Inc., said by telephone from Chicago. “There’s time now for the markets to ration demand, and I think it does happen at these levels.”
Corn futures for December delivery fell 7.75 cents, or 1 percent, to settle at $7.675 a bushel at 1:15 p.m. on the Chicago Board of Trade. On Aug. 29, the grain touched $7.79, the highest for the most-active contract since June 9. The price is up 15 percent this month.
Soybean futures for November delivery advanced 0.5 cent to $14.575 a bushel in Chicago, after touching $14.65, the highest for the most-active contract since July 2008. The price is up 7.4 percent this month.
Wheat futures for December delivery gained 0.75 cent to $7.915 a bushel in Chicago. On Aug. 29, the price climbed to $8.055, the highest for a most-active contract since May 31. The grain is up 11 percent this month.
Soybeans, which mature later than corn, still may face more damage from dry weather in the Midwest, said Dale Durchholz, a senior market analyst at AgriVisor LLC in Bloomington, Illinois. Drought in the Great Plains also may cut winter-wheat planting in the next two months, he said.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, USDA data show. Soybeans ranks second at $38.9 billion, and wheat is fourth at $13 billion, after hay.
To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
