Corn, Soybeans Drop as Rains Ease Dry Spell in Argentina, Brazil
February 08, 2012, 1:48 PM ESTBy Jeff Wilson
Feb. 8 (Bloomberg) -- Corn fell for a third day and soybeans declined as rain improved prospects for crops in Argentina and Brazil that have been hurt by unusually dry weather in January.
The most impressive rains of the growing season, with as much as 4 inches (10 centimeters) of rain overnight, will aid crops in Argentina and move into southern Brazil tomorrow, the Commodity Weather Group LLC said in a report today. Farmers increased corn sales as spot prices rose to a three-week high on Feb. 3, unloading supplies before the U.S. Department of Agriculture issues its monthly supply and demand report tomorrow.
“The rains are definitely stabilizing crop yields and keeping pressure on the market,” Brian Grete, the senior market analyst for the Cedar Falls, Iowa-based Professional Farmers of America newsletter, said in a telephone interview. “We are probably seeing an increase in sales by farmers ahead of the USDA report.”
Corn futures for March delivery fell 0.5 percent to $6.39 a bushel at 12:22 p.m. on the Chicago Board of Trade, heading for the biggest drop since Jan. 30. Earlier, the price rose 1 percent to a one-week high on speculation that hot, dry weather reduced production in Argentina and Brazil.
Soybean futures for March delivery dropped less than 0.1 percent to $12.315 a bushel in Chicago, after earlier gaining 1 percent to $12.4475, the highest since Jan. 3.
Prices had risen on speculation that USDA will reduce its forecasts for world inventories.
World corn and soybean inventories before the harvests in the Northern Hemisphere probably will fall as the USDA probably will report a drop in world corn and soybean inventories before the Northern Hemisphere harvest, and cut its forecasts for output from South America. Argentina is the biggest shipper of corn after the U.S., and Brazil is expected to be the top exporter of soybeans this year, USDA said Jan. 12.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, USDA data show.
--Editors: Thomas Galatola, Steve Stroth
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
