Corn and soybeans fell on speculation that rains will improve newly planted crops in Brazil and Argentina, the two biggest exporters after the U.S.
Most of the corn and soybean growing region in Brazil will receive up to 3.5 inches (8.9 centimeters) of rain the next five days, boosting soil moisture and early plant development, the Commodity Weather Group LLC said in a report today. Parts of Argentina received as much as 1 inch of rain the past 24 hours, more than was forecast and helping to relieve moisture stress, the private forecaster said.
“The forecasts are offering more rain, so there is little interest in holding positions into the weekend,” said Tim Hannagan, a grain analyst for PFG Best Inc. in Chicago. “Crops in Brazil will benefit from these rains, and even some of the dryness concerns in Argentina may be temporarily put to rest.”
Corn futures for March delivery fell 10.75 cents, or 1.9 percent, to close at $5.555 a bushel at 1:15 p.m. on the Chicago Board of Trade. Most-active futures fell 6.5 percent in November, the first monthly drop since May.
Soybean futures for January delivery fell 3.25 cents, or 0.2 percent, to close at $12.7975 a bushel in Chicago. The commodity touched a 26-month high at $13.485 on Nov. 12 amid rising Chinese demand.
Prices also fell today on speculation that the debt crisis in Europe will spread, damping the global economy and demand for U.S. crops.
European Central Bank President Jean-Claude Trichet said the ECB will delay the withdrawal of emergency liquidity measures and keep buying government bonds as the debt crisis creates “acute” tensions in financial markets.
“The European debt problems have the markets on the defensive,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa.
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, government figures show, followed by soybeans at $31.8 billion.