Corn, Soybean Prices Drop on Speculation Rain to Ease Stress on U.S. Crops
Corn prices fell from a four-month high and soybeans declined on speculation that rains later this week will boost soil moisture and improve yield prospects in the U.S., the world’s biggest exporter of the crops.
Rains will move east from the western Midwest this week, aiding fields that got less than 25 percent of the normal amount of rain in the past week, Allen Motew, a meteorologist at Chicago-based QT Weather, said in a report. Cooler weather and more precipitation next week will improve conditions for corn pollination, he said.
“The midday forecasts show more rains in the driest areas, and some drying for the western Midwest,” said Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago. “The market ran out of buyers after the earlier rally.”
Corn futures for December delivery fell 5.25 cents, or 1.4 percent, to $3.7925 a bushel on the Chicago Board of Trade. Earlier, the price reached $3.915, the highest level for a most- active contract since March 1. The price jumped 6.7 percent last week after the government said U.S. farmers planted less than they intended this year.
Soybean futures for November delivery fell 5.75 cents, or 0.6 percent, to $9 a bushel.
Global economic growth may slow, reducing demand for food, animal feed and fuels made from the crops, said Dale Durchholz, the senior market analyst at AgriVisor LLC in Bloomington, Illinois.
‘Lack of Confidence’
Service industries in the U.S. expanded in June at a slower pace than analysts forecast, signaling the economy is cooling. The property market in China is beginning a “collapse” that will hit the banking system, said Kenneth Rogoff, a Harvard University professor and former chief economist of the International Monetary Fund.
“There is a lack of confidence in the world economy,” Durchholz of AgriVisor said. “People don’t feel comfortable owning stocks or commodities.”
China is the top soybean importer and second-largest consumer of corn.
In the U.S., corn is the biggest crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government figures show.