Corn, Soybeans Fall as Demand Ebbs After Rally; Wheat Advances

Corn and soybeans fell for the second straight day on bets that demand for supplies from the U.S., the world’s leading exporter, will ebb following price rallies to the highest since mid-2008. Wheat gained.

Archer Daniels Midland Co., the largest grain processor, delivered 1.96 million bushels of corn against expiring May futures, exchange data show. Brazil, the second-biggest soybean shipper, may harvest 72.6 million metric tons this year, Celeres, a crop forecaster, said yesterday. That topped a previous estimate of 70.6 million tons.

“ADM making delivery of corn was a shocker and is a sign of slowing demand,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “Increasing supplies in South America will slow demand for U.S. soybeans.”

Corn futures for July delivery fell 10.75 cents, or 1.5 percent, to close at $7.2375 a bushel at 1:15 p.m. on the Chicago Board of Trade. Yesterday, the price dropped 2.9 percent. The most-active contract has risen 95 percent in the past year, touching $7.8875 on April 11, the highest since June 2008.

Soybean futures for July delivery dropped 29.25 cents, or 2.1 percent, to close at $13.6375 a bushel. Yesterday, the price declined 1 cent.

On Feb. 11, the commodity reached $14.5575, the highest since July 2008. The oilseed used to make animal feed and cooking oils has gained 38 percent in the past year.

Warm, Dry Weather

Prices also fell on speculation that warmer, drier weather will accelerate U.S. planting that has been delayed by rain and cold temperatures, Roose said. About 13 percent of the U.S. corn crop was planted as of May 1, compared with 40 percent on average the past five years, the U.S. Department of Agriculture said yesterday.

Archer Daniels said today that fiscal third-quarter profit rose 37 percent as food-ingredient demand climbed.

“Global demand for crops and agricultural products remains strong,” ADM Chief Executive Officer Patricia Woertz said in a statement.

Wheat futures for July delivery rose 1.5 cents, or 0.2 percent, to close at $7.9325 a bushel. The price has gained 58 percent in the past year as adverse weather reduced global production.

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show. Wheat is the fourth-largest, behind hay, at $13 billion.

(Source: http://www.bloomberg.com/news/2011-05-03/corn-soybeans-fall-as-demand-ebbs-after-rally-wheat-advances.html)