Corn fell, heading for the longest losing streak since June, as some lawmakers urged the U.S. to amend an alternative-fuel mandate, dimming prospects for demand. Soybeans and wheat also dropped.
A bipartisan group of lawmakers plans to ask the Obama administration to lower the nation’s mandate for ethanol made from the grain, according to an e-mail yesterday from Representative Steve Womack, an Arkansas Republican. The worst U.S. drought since 1956 sent corn prices to a record this week, raising the prospect of higher grocery bills as the cost of grain-based livestock feed jumped.
“If they drop the mandate or reduce it, it’s going to be negative for corn,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said by telephone. “We knew when we passed this policy that this was going to happen some day.”
Corn futures for December delivery dropped 1.5 percent to $7.885 a bushel at 10:26 a.m. on the Chicago Board of Trade. Prices headed for a third day of declines, which would be the longest slump since June 13.
The grain jumped 27 percent last month, the biggest such gain since 1988, and touched a record $8.205 on July 31. The Midwest drought has cut production in the U.S., the world’s biggest producer and exporter.
The Renewable Fuels Standard mandates ethanol production of 13.2 billion gallons in 2012. That would consume 4.9 billion bushels of corn this year, 38 percent of the country’s production, Department of Agriculture data show.
Soybean futures for November delivery declined 1.7 percent to $16.02 a bushel on the CBOT, heading for the biggest loss in since July 26.
Wheat futures for September delivery fell 2.1 percent to $8.6125 a bushel in Chicago. The grain, which competes with corn in livestock feed, surged 17 percent last month.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show. Wheat is the fourth-largest at $14.4 billion, behind hay.
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