Corn Drops on Speculation Chinese Demand Will Slow for U.S. CropJeff Wilson
Corn prices dropped for the first time in three sessions on speculation that China may reduce imports of U.S. grain as domestic inventories swell. Wheat also fell, while soybeans gained.
Supplies held in Chinese government silos may reach 60 million metric tons before the start of this year’s harvest, Fred Gale, an economist with the U.S. Department of Agriculture, said today. Demand has slowed from poultry farmers as cases of human infections of the H7N9 avian influenza spread. Stockpiles held by the state and by farmers and consumers may rise 10 percent from a year earlier to 72 million tons by Sept. 30, the USDA has forecast.
“Chinese demand is slowing, and that can have repercussions for the next year,” Peter Meyer, the senior director of agricultural commodities for Pira Energy Group in New York, said in a telephone interview. “The bird flu has reduced feed demand in China.”
Corn futures for delivery in May fell 1.9 percent to close at $4.785 a bushel at 1:15 p.m. on the Chicago Board of Trade, after rising 1.8 percent in the prior two sessions.
China may import less than 3 million tons of corn in the year that ends Sept. 30, according to COFCO Corp., China’s largest food company. That compares with the USDA’s estimate of 5 million.
Wheat futures for May delivery dropped 1.7 percent to $7.0375 a bushel in Chicago, after reaching $7.235, the highest since May 10. The grain dropped on speculation that rising prices will curb demand, Meyer said.
Prices have gained 27 percent since January amid shipping delays in Canada, tension in Ukraine and worsening crop conditions in the U.S., the world’s biggest exporter.
Soybean futures for delivery in May rose 0.2 percent to $14.3375, after touching $14.565, the highest since March 7.
Oat futures for delivery in May fell by the exchange’s 20-cent limit to $4.10 a bushel on the CBOT. The most-active futures touched a record $5.045 on March 4.