Soybeans, corn and wheat declined in Chicago, reversing earlier gains, as U.S. budget negotiations stalled, raising uncertainty about the outlook for the economy.
Talks over the so-called U.S. fiscal cliff are stalled as President Barack Obama and Republicans offer competing ways to avoid more than $600 billion in automatic spending cuts and taxes that will take effect in January if Congress doesn’t act.
“We’ve seen open interest in grains drop considerably, a lot of that is coming off the uncertainty in Washington,” Paul Georgy, president of Allendale Inc., said in a market-report video today. “It seems like we’re not getting any closer to solving this fiscal cliff situation, and that is providing some negative attitude.”
Soybeans for delivery in January dropped as much as 0.4 percent on the Chicago Board of Trade and were down 0.1 percent at $14.52 a bushel at 3:22 p.m. Paris time. The oilseed advanced 20 percent this year and reached a record $17.89 in September amid the worst U.S. drought in half a century.
Corn for delivery in March slipped 0.1 percent to $7.5425 a bushel, after earlier gaining 0.3 percent. Demand for U.S. corn exports picked up in recent weeks at about $7 a bushel, according to Georgy.
“Currently we’re trading in this $7.50, $7.60 range, and it seems to have shut off demand again,” Georgy said. “The problem we’re seeing with demand is the price of U.S. corn in the Gulf is $30 higher than South American corn.’
Wheat for delivery in March was little changed at $8.615 a bushel. Milling wheat for delivery in January traded on NYSE Liffe in Paris dropped 0.1 percent to 269 euros ($352.20) a metric ton.
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