Corn and soybean futures declined for the second straight day on speculation that rain will improve soil moisture for developing crops in Brazil and Argentina, the world’s biggest exporters behind the U.S.
As much as 0.5 inch (1.3 centimeters) of rain fell in Argentina in the past 24 hours and another storm, expected on Dec. 11, will bring as much as 1 inch to the driest growing areas, Mike Tannura, the president of T-Storm Weather, said in a report. Precipitation in the next week will maintain beneficial conditions for crops in Brazil, he said.
“Improved rainfall in South America has encouraged speculative selling,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “It’s all about an improving weather story.”
Corn futures for March delivery fell 6.25 cents, or 1.1 percent, to close at $5.6175 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price reached $5.7575, the highest since Nov. 15. The grain dropped 1 percent yesterday.
Soybean futures for January delivery declined 3 cents, or 0.2 percent, to $12.855 a bushel. Yesterday, the price fell 0.9 percent after reaching a three-week high of $13.0675.
On Nov. 9, corn jumped to a 26-month high of $6.175 after the U.S. Department of Agriculture said adverse weather reduced the size of the domestic crop. On Nov. 12, soybeans reached $13.485, the highest since August 2009, as Chinese demand surged for U.S. supplies.
Corn prices also fell on speculation that increasing supplies of Australian wheat for livestock feed will erode Asian demand for U.S. grain supplies, said Brian Grete, the senior market analyst at Professional Farmers of America newsletter in Cedar Falls, Iowa.
“Asian feed buyers will buy a lot of lower-quality wheat from Australia because of cheaper shipping costs and prices than U.S. corn,” Grete said. “The rain-damaged wheat crop in Australia had a negative impact on corn.”
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government data show.