Bloomberg News

Corn Slides in Chicago as Ukraine, EU Crops Boost Competition

November 01, 2011

Oct. 31 (Bloomberg) -- Corn dropped in Chicago as bigger crops in Ukraine and the European Union are intensifying competition for U.S. grain in export markets. Wheat and soybeans also declined.

December-delivery corn fell as much as 1.9 percent to $6.425 a bushel on the Chicago Board of Trade and was at $6.4875 at 1:02 p.m. Paris time. The grain added 9.5 percent this month, recovering some of September’s 23-percent plunge.

Ukraine had harvested 68 percent of its planted corn last week, reaping 14.1 million metric tons, more than all of last year’s harvest, the Agriculture Ministry reported. The EU, normally a net importer of corn, is exporting the grain at the fastest pace in at least seven years.

Prices “could be under pressure due to lack of export demand” for U.S. corn, Lynette Tan, an analyst at Phillip Futures Pte., said from Singapore.

Corn yields in Ukraine jumped to 5.76 metric tons a hectare (2.47 acres) this year from 4.4 tons in 2010 the Agriculture Ministry said Oct. 28. Ukraine may boost production to 21 million tons this marketing year, from 11.9 million tons a year earlier, according to the U.S. Department of Agriculture.

EU corn exports rose to 849,877 tons in the first 17 weeks of the 2011-12 marketing year, the bloc reported last week. That compared with about 272,000 tons a year earlier.

“European production should approach 64 million tons,” Paris-based farm adviser Agritel said in a research note today. “Fortunately export activity remains very elevated.”

Paris Corn

Corn traded on NYSE Liffe in Paris for delivery in January, the contract with the greatest open interest, was unchanged at 189 euros ($264) a ton.

Soybeans for January delivery declined 0.8 percent to $12.165 a bushel in Chicago, narrowing the monthly gain for the most-active contract to 3.2 percent.

Argentine truck owners who ship soybeans and corn are blocking access to the country’s grain ports, said Edgardo Aniceto, a spokesman for the Federation of Argentine Transporters. The South American nation is the second-largest exporter of corn and soybeans, according to the USDA.

The blockade “will become a supportive factor for prices, if it is prolonged,” Hiroyuki Kikukawa, general manager for research at Ido Securities Co. Ltd. in Tokyo, said in an e- mail.

Wheat for December delivery fell 0.9 percent to $6.385 a bushel on the Chicago Board of Trade, narrowing the advance this month to 4.8 percent. Milling wheat for January delivery traded in Paris was unchanged at 183 euros a ton.

--With assistance from Phoebe Sedgman in Melbourne, Kateryna Choursina in Kiev, Laura Price in Buenos Aires, Simon Kennedy in London and Sandrine Rastello in Washington. Editor: Jake Lloyd-Smith

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net.

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net Claudia Carpenter at ccarpenter2@bloomberg.net.


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