Corn futures fell to a three-year low and soybeans dropped the most this month on signs of supply gains in the U.S., the world’s biggest producer. Wheat rose, capping the fourth straight weekly gain.
Beneficial rain in September boosted corn yields by allowing plants to mature late in the season and helped soy plants fill pods with bigger beans, Macquarie Bank said in a report. Yields are as much as 20 bushels an acre higher than farmers expected for the grain and 10 bushels for the oilseed, MaxYield Cooperative in West Bend, Iowa, said yesterday.
“Farmers are harvesting yields that are consistently bigger to much bigger than they were planning,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “We have to rebuild demand in the world markets with lower prices to sell the excess.”
Corn futures for December delivery dropped 1.1 percent to close at $4.3325 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.325, the lowest for a most-active contract since Aug. 31, 2010. Prices are down 38 percent this year, heading for a record annual slump.
Soybean futures for November delivery slumped 1.6 percent to $12.6675 a bushel, the biggest drop since Sept. 30. The oilseed, used to make animal feed, cooking oil and fuel, fell for a second week and is down 16 percent since the end of May.
Demand for the crops from makers of ethanol and biodiesel may shrink if the U.S. government amends a biofuel mandate.
The Environmental Protection Agency is considering scaling back legal requirements on the use of ethanol next year amid complaints from refiners that mandates would exceed their ability to blend it into fuel without putting engines at risk.
“Corn use for ethanol may be 200 million to 250 million bushels” lower than the current USDA forecast, Richard Feltes, the vice president of research at R.J. O’Brien & Associates in Chicago, said in a note to clients. The change must be approved by the Office of Management of Budget and may face a court challenge by the ethanol industry, he said.
Wheat futures for December delivery rose 1 percent to $6.9225 a bushel on the CBOT, capping a fourth straight weekly gain.