Corn fell the most since mid-January and soybeans declined from a five-month high on speculation that farmers took advantage of last month’s rally by boosting sales to makers of livestock feed, biofuel and food.
Before today, soybeans in Chicago jumped 15 percent since Jan. 13, and corn gained 9.1 percent as hot, dry weather reduced crop yields in South America. Rain will aid crops in parts of Argentina and eastern Brazil the next week with dry conditions expanding in parts of western Brazil, World Weather Inc. said in a report today. The U.S. Department of Agriculture will update its world supply and demand forecasts on March 9.
“Farmers have increased sales with the rally in prices, and that slowed buying interest” from processors, Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a telephone interview. “The markets are near equilibrium ahead of the USDA reports.”
Corn futures for May delivery dropped 2.3 percent to close at $6.3875 a bushel at 1:15 p.m. on the Chicago Board of Trade, the largest drop since Jan. 12. On March 5, the price touched $6.6525, the highest since Nov. 9.
Soybean futures for May delivery slid 0.6 percent to $13.2675 a bushel in Chicago, after reaching $13.39, the highest since Sept. 21.
Corn also slumped on speculation that China, the world’s biggest consumer of the commodity, will reduce imports of the grain and boost planting to feed expanding hog herds and chicken flocks, said Rich Nelson, the director of research for Allendale Inc. in McHenry, Illinois.
China’s Heilongjiang Province, which produced about 15 percent of China’s crop last year, has enough land to increase planting by as much as 15 percent this year, Governor Wang Xiankui said yesterday. The nation won’t require “large imports” this year as record output in 2011 will cover demand, Nie Zhenbang, head of the State Administration of Grain said yesterday.
“The market is focused on the potential for bigger crops in China and reduced demand for U.S. exports,” Allendale’s Nelson said in a telephone interview.
The U.S. was the largest exporter of both commodities in the year that ended Sept. 30, according to government estimates. Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion.