Corn futures headed for the longest
slump in 32 years on speculation that beneficial weather will
boost crops in Argentina, the world’s second-biggest exporter,
and Brazil.
As much as 0.75 inch (1.9 centimeters) of rain fell in
Argentina overnight, and an additional 1.75 inches are expected
starting Feb. 17, easing stress from dry conditions this year,
Commodity Weather Group LLC in Bethesda, Maryland, said in a
report. Precipitation will boost crops in southern Brazil in the
next two weeks, and drier weather in northern areas will aid
harvesting, the company said.
Corn prices were poised for the ninth straight decline, the
longest slide since December 1980. The U.S. Department of
Agriculture said on Feb. 8 that global reserves as of Oct. 1
will be 118.04 million metric tons, up from 115.99 million
predicted last month and surprising analysts who forecast a
decline. Combined output in Argentina and Brazil will increase
5.9 percent this year.
“South America, for the most part, has a good-sized crop
in the bag,” Jason Britt, the president of brokerage Central
States Commodities Inc. in Kansas City, Missouri, said in a
telephone interview. “Argentina is still up for debate, but
it’s stabilizing.”
Corn futures for March delivery dropped 0.5 percent to
$6.9275 a bushel at 12:20 P.m. on the Chicago Board of Trade.
Volume at this time was 72 percent more than the average in the
past 100 days.
Through yesterday, the grain tumbled 17 percent from a
record settlement of $8.3875 on Aug. 21. The all-time high
intraday price was $8.49 on Aug. 10 following a drought that cut
U.S. production.
Feed, Ethanol
Larger inventories may reduce livestock-feed costs for pork
producer Smithfield Foods Inc. (SFD) and poultry processor Sanderson
Farms Inc. Grain-based ethanol production has declined in the
U.S., and plants are closing.
In the four months ended Jan. 31, exports from the U.S.,
the top shipper, have tumbled 55 percent to 8.12 million tons
from a year earlier, USDA data show.
Wheat futures for March delivery fell 0.1 percent to $7.31
a bushel in Chicago. Earlier, the price touched $7.225, the
lowest for a most-active contract since June 25.
Soybean futures for May delivery gained 0.1 percent to
$14.115 a bushel. The price dropped in the previous five
sessions, the longest slide since September 2011.
Corn is the biggest U.S. crop, followed by soybeans, hay
and wheat.
To contact the reporters on this story:
Tony C. Dreibus in Chicago at
tdreibus@bloomberg.net;
Jeff Wilson in Chicago at
jwilson29@bloomberg.net
To contact the editor responsible for this story:
Steve Stroth at
sstroth@bloomberg.net