Jan. 21 (Bloomberg) -- Soybean futures tumbled the most in 16 weeks on speculation that rain this week will boost yields in Brazil and Argentina, reducing demand for U.S. supplies. Corn rose, while wheat fell.
As much as 1.75 inches (4.4 centimeters) of rain in the past 12 hours in southern Argentina and 2 inches beginning tomorrow for the remaining crop regions will break a monthlong dry pattern, T-Storm Weather LLC in Chicago said in a report. About 2 inches in the next three days will aid plants in southern Brazil after weekend showers reduced dry soils in northern area, the forecaster said
“The soybean market is realizing that these rains are going to help South America produce a very big crop this year,” Roy Huckabay, an executive vice president at the Linn Group in Chicago, said in a telephone interview. “There is talk that overseas demand may soon switch to South America.”
Soybean futures for delivery in March tumbled 2.7 percent to close at to $12.805 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest decline for a most-active contract since Sept. 30. The price gained 3 percent last week on increased U.S. sales to China, the world’s top consumer and importer.
Brazil announced a plan yesterday to reduce bottlenecks at ports. Last year, delays lasted as long as three months. The nation is the top shipper of soybeans, and Argentina is the largest exporter of soy-based animal feed and cooking oil.
Corn futures for March delivery rose 0.2 percent to $4.25 a bushel. The grain has plunged 42 percent in the past 12 months.
Demand increased from producers of livestock and ethanol after the price slump, Huckabay said. U.S. consumers increased forward purchases out to 90 days after buying only immediate supplies in the past several months, he said.
Wheat futures for March delivery declined 0.2 percent to $5.6225 a bushel. On Jan. 10, the price touched $5.605, the lowest since July 2010, after the USDA forecast that global production will rise to a record, boosting inventories.
--Editors: Patrick McKiernan, Joe Richter