Jan. 23 (Bloomberg) -- Soybeans and corn fell the most in two weeks on speculation that this month’s rally will curb demand from makers of livestock and poultry in the U.S., the world’s biggest producer of both crops.
Red-meat inventories held in storage rose 8.9 percent to 1.047 billion pounds (474,911 metric tons) on Dec. 31 from a year earlier, while total poultry held in warehouses jumped 16 percent in the past year, the U.S. Department of Agriculture said yesterday in a monthly report. Through yesterday, corn jumped 4.3 percent this month and soybeans gained 3 percent, in part because feed demand in the quarter ended Dec. 1 was stronger than expected.
“Rising inventories of meat and poultry are a sign of slowing consumer demand, and that will have a negative impact on feed demand,” Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview.
Soybean futures for March delivery fell 1 percent to close at $14.37 a bushel at 2 p.m. on the Chicago Board of Trade, capping the biggest decline since Jan. 4. The most-active futures yesterday touched $14.6075, the highest since Dec. 19.
Corn futures for March delivery dropped 1.1 percent to $7.2075 a bushel in Chicago, the largest decline since Jan. 4.
U.S. inventories of the two crops on Dec. 1 fell to the lowest in nine years after the worst drought since the 1930s cut production for a third consecutive season.
Soybeans and corn extended losses after forecasts showed better rains for South America in the next ten days, reducing overseas demand for U.S. supplies, Schultz said. Up to 2 inches (5.1 centimeters) of rain may fall in parts of Brazil and Argentina beginning Jan. 25 with more expected by Jan. 31, QT Weather in Chicago said in a report to clients.
Brazil and Argentina were the biggest exporters of both crops last year after the U.S.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.
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