Corn Drops to 1-Week Low on Argentina Rains; Soy, Wheat Decline

Dec 30, 2013 3:13 pm ET

Dec. 30 (Bloomberg) -- Corn fell to a one-week low, set for the biggest annual drop on record, on speculation that rain in Brazil and Argentina will aid crops hampered by hot and dry conditions. Soybeans declined, and wheat reached a 19-month low.

Precipitation helped “recharge topsoil moisture” in parts of South America over the weekend, Commodity Weather Group LLC in Bethesda, Maryland, said in an e-mailed report. Rains over the next six to 15 days in southern Brazil will help eliminate “dryness concerns” for crops, the forecaster said. Brazil, Argentina and Ukraine will be the largest corn exporters after the U.S. in 2014, the government estimates.

Prices are falling on “the weather in South America,” Jerry Gidel, the chief grain analyst for Rice Dairy LLC in Chicago, said in a telephone interview. It’s “the same rain on the beans and the corn in Argentina,” he said.

Corn futures for delivery in March fell 0.9 percent to settle at $4.235 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.23, the lowest for the most-active contract since Dec. 18. Prices have slumped 39 percent this year.

World corn production may reach a record 964.3 million metric tons in the 2013-2014 season, after U.S. farmers harvested the biggest crop ever, the U.S. Department of Agriculture estimates.

The Argentine provinces of Buenos Aires, Santa Fe and Cordoba will see rain today, with showers remaining in northern growing areas through Jan. 1, according to a DTN forecast. Areas of Cordoba had as much as 1.5 inches (3.8 centimeters) during the weekend. Brazil will see increasing showers beginning mid- week, which will “maintain favorable growing conditions,” according to the report.

Soybean futures for March delivery dropped 0.4 percent to $13.0875 a bushel on the CBOT, down 7.1 percent this year. Wheat futures for March delivery declined 1.4 percent to $6.005 a bushel in Chicago, down 23 percent in 2013. Earlier, the price touched $6, the lowest since May 15, 2012.

--With assistance from Phoebe Sedgman in Melbourne. Editors: Steve Stroth, Thomas Galatola