Soybeans and corn fell on speculation that this month’s rally will curb livestock and poultry feed demand in the U.S., the world’s biggest producer of both crops.
Red-meat inventories held in storage rose 8.9 percent to 1.047 billion pounds (474,911 metric tons) on Dec. 31 from a year earlier, while total poultry held in warehouses jumped 16 percent in the past year, the U.S. Department of Agriculture said yesterday in a monthly report. Through yesterday, corn jumped 4.3 percent this month and soybeans gained 3 percent, in part because feed demand in the quarter ended Dec. 1 was stronger than expected.
“Rising inventories of meat and poultry are a sign of slowing consumer demand, and that will have a negative impact on feed demand,” Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview.
Soybean futures for March delivery fell 0.2 percent to $14.485 a bushel at 11:18 a.m. on the Chicago Board of Trade, erasing an earlier gain of 0.4 percent. The most-active futures yesterday touched $14.6075 a bushel, the highest since Dec. 19.
Corn futures for March delivery slid 0.2 percent to $7.27 a bushel in Chicago, heading for the first decline in three sessions.
Soybeans and corn earlier rose on speculation that dry weather may damage yield potential in Argentina, boosting overseas demand for U.S. supplies. U.S. inventories of the crops on Dec. 1 fell to the lowest in nine years after the worst drought since the 1930s cut production for a third consecutive season. Argentina is the biggest exporter of both crops after the U.S. and Brazil.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth at email@example.com