Corn declined to trade near a three-year low on concern that demand for the grain for making ethanol will be reduced if the U.S. government scales back legal requirements on the use of biofuels.
The contract for delivery in December dropped as much as 0.7 percent to $4.35 a bushel on the Chicago Board of Trade, matching the Oct. 2 intraday low that was the lowest level for futures since August 2010. Corn was at $4.3525 by 10:56 a.m. in Singapore, set for a second week of decline and heading for a 38 percent slump this year on prospects for a record U.S. crop.
The U.S. Environmental Protection Agency is considering cutting the mandate on the use of corn-based ethanol in 2014, according to an internal proposal provided to Bloomberg. The agency would call for the use of 13 billion gallons of conventional corn-based ethanol, down from 13.8 billion gallons this year, the proposal said.
A cut in the ethanol mandate will be “negative” for corn, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone today.
Wheat for December delivery dropped 0.4 percent to $6.83 a bushel. Soybeans for November delivery declined 0.2 percent to $12.8575 a bushel.