Corn futures fell, capping the longest slump in 32 years, on speculation that beneficial weather will boost crops in Argentina, the world’s second-biggest exporter, and Brazil.
As much as 0.75 inch (1.9 centimeters) of rain fell in Argentina overnight, and an additional 1.75 inches are expected starting Feb. 17, easing stress from dry conditions this year, Commodity Weather Group LLC in Bethesda, Maryland, said in a report. Precipitation will boost crops in southern Brazil in the next two weeks, and drier weather in northern areas will aid harvesting, the company said.
Corn prices dropped for the ninth straight session, the longest slide since December 1980. The U.S. Department of Agriculture said on Feb. 8 that global reserves as of Oct. 1 will be 118.04 million metric tons, up from 115.99 million predicted last month and surprising analysts who forecast a decline. Combined output in Argentina and Brazil will increase 5.9% this year.
“South America, for the most part, has a good-sized crop in the bag,” Jason Britt, the president of brokerage Central States Commodities Inc. in Kansas City, Missouri, said in a telephone interview. “Argentina is still up for debate, but it’s stabilizing.”
Corn futures for March delivery dropped 0.1% to settle at $6.955 a bushel at 2 p.m. on the Chicago Board of Trade. Trading volume doubled compared with the average in the past 100 days.
The grain has tumbled 17% from a record settlement of $8.3875 on Aug. 21. The all-time high intraday price was $8.49 on Aug. 10 following a drought that cut production in the U.S., the top exporter.
Larger inventories may reduce livestock-feed costs for pork producer Smithfield Foods Inc. and poultry processor Sanderson Farms Inc. Grain-based ethanol production has declined in the U.S., and plants are closing.
In the four months ended Jan. 31, exports from the U.S. have tumbled 55% to 8.12 million tons from a year earlier, USDA data show.
Wheat prices rebounded from a seven-month low on speculation that rain will miss major growing areas in the U.S., the top exporter.
Storms expected in parts of the Great Plains in the next seven to 10 days probably won’t help winter wheat in western Kansas and Oklahoma, Telvent DTN in Omaha, Nebraska, said in a report.
“People have to remember we’re coming off the worst drought” since the Dust Bowl era of the 1930s, Jason Britt, the president of Central States Commodities Inc., a brokerage in Kansas City, Missouri, said in a telephone interview. “There’s not a farmer out there who’s not already worried about that.”
Wheat futures for March delivery gained 0.5% to $7.355 a bushel in Chicago. Earlier, the price touched $7.225, the lowest for a most-active contract since June 25.
Soybean futures for May delivery gained 0.3% to $14.135 a bushel. The price dropped in the previous five sessions, the longest slump since September.
Corn is the biggest U.S. crop, followed by soybeans, hay and wheat.