April 15, 2008

US corn prices fall on dry weather forecasts

US corn prices have fallen sharply on Friday after forecasts of dry weather in the US corn belt eased worries on delayed spring planting.

US corn prices this year have escalated by 23 percent due to dwindling stockpiles, the expanding demand for livestock feed and ethanol consumption.

The previous days of cold and rainy weather in the US corn belt have threatened delays in the spring planting season which would further tighten the supply.

Jason Ward, an analyst with Northstar Commodity in Minneapolis said the dry weather might help farmers to start spring planting. It will not help everyone but it is having an effect on prices, he added.

Corn for May delivery fell 10 cents to settle at US$5.8425 a bushel on the Chicago Board of Trade, its lowest level this week.

It closed at a record US$6.05 a bushel on Wednesday, so some profit-taking was expected.

Last week, corn hit the US$6 threshold after USDA predicted less planting of corn in 2008. The department said farmers will plant 86 million acres of corn this year, a drop of 8 percent.

Meanwhile, other agriculture futures also fell Friday. Wheat for May delivery dropped 26.5 cents to settle at US$8.965 a bushel on the CBOT, while May soy lost 23.5 cents to settle at US$13.325 a bushel.