Corn Drops on Expectation U.S. Farmers to Boost Planting After Price Rally

Corn fell for the first time in four days in Chicago by the concern of U.S. farmers planting could increase this year on speculation a three-day rally curbed demand. Wheat and soybeans fell.
U.S. farmers increased planting of corn this year, increasing supply and reducing prices over the next six months, Goldman Sachs Group Inc. (GS) said in a report sent by email to customers yesterday. Farmers in the world's largest exporter probably sow 92.1 million acres of corn this year, the bank said.
"Corn is likely to be under selling pressure in the short term from the perspective of market fundamentals," said Chris Kwon, a trader at KTB Investment & Securities Co. in Seoul. "The high prices may mean more plantings, which could be a bearish factor."
Corn for May delivery fell 10 cents, or 1.5 percent, to $ 6,765 per bushel at 12:14 pm London time on the Chicago Board of Trade. Grains rose 11 percent in the three days through yesterday. Futures rose 82 percent last year as stronger demand eroded U.S. inventories, which the government has forecast to hit a 15-year low this year.
Corn growers planted 88.2 million acres in the past year, according to the U.S. Agriculture Department, estimated surface this year to 31 March. Prices may fall to $ 6.20 a bushel in the next three months, six dollars in six months and $ 5.80 a year, according to the report by Goldman Sachs.
Wheat for May delivery fell 13.5 cents, or 1.9 percent, to $ 7.075 a bushel, the decline for a second day. The grain hit a five-month high last week after the earthquake and tsunami damaged the port in Japan. Milling wheat for May delivery traded on NYSE Liffe Paris dropped by 4 euros, or 1.8 percent, to 222 euros ($ 315.95) per metric ton.
May-delivery soybeans fell 16 cents, or 1.2 percent, to $ 13.47 a bushel in Chicago.

(Source: http://www.bloomberg.com/news/2011-03-22/corn-drops-on-expectation-u-s-farmers-to-boost-planting-after-price-rally.html)