Soybeans Tumble to Six-Month Low on Slowing Demand; Corn SlidesJeff Wilson
Soybeans tumbled to the lowest since June on speculation that improving crops in South America will curb demand for U.S. supplies. Corn fell for the fifth straight week, the longest slump since September 2011.
As much as 3 inches (7.6 centimeters) of rain will fall in the next five days, maintaining favorable conditions for corn and soybeans in most of southern and central Brazil, World Weather Inc. said in a report. In Argentina, drier, warmer weather expected in the next 10 days will firm muddy soils and allow farmers to complete planting, the forecaster said.
“South America weather is looking very good for big crops,” Gregg Hunt, a market analyst for Archer Financial Services Inc. in Chicago, said in a telephone interview. “The world is moving away from the U.S. as the main supplier of corn and soybeans because overseas farmers are producing more.”
Soybean futures for March delivery dropped 1.4 percent to close at $13.6725 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $13.56, the lowest since June 19. The price, down 3.6 percent this week, jumped 17 percent last year when dry weather reduced output in the U.S. to a four-year low.
Corn futures for March delivery fell 1.3 percent to $6.8025 a bushel on the CBOT after touching $6.795, the lowest since July 3. The grain dropped 2 percent for the week.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell as much as 1.2 percent after Federal Reserve policy makers said they will probably end debt purchases that have fueled investor demand for riskier assets.
“The signal from the Fed is that the easy monetary policy is ending and that will reduce demand for all commodities,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “The bubble in commodities has burst.”
In the U.S., corn is the biggest crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.