Corn fell for a third straight day, capping 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 0.6 percent to settle at $7.9575 a bushel at 2 p.m. on the Chicago Board of Trade. Prices declined for a third day, 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 retreated 0.8 percent to $16.165 a bushel on the CBOT, the biggest loss since July 26. The price gained 15 percent last month.
Wheat futures for September delivery tumbled 1.6 percent to $8.65 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.