April 29, 2011

Corn plunges by CBOT limit as demand dwindles

US corn futures tumbled by the highest level allowed by CBOT after a government report showed that demand is easing for supplies from the US, the world's biggest exporter.

US exporters sold 348,969 tonnes of corn in the week ended April 21, down 43% from a week earlier and the smallest amount in six months, the USDA said. Prices doubled in the 12 months after adverse weather limited the size of last year's crop and demand rose for livestock feed and grain-based fuel.

"Export sales are showing a little bit of a slowdown in demand," said Bill Gentry, a broker at Risk Management Commodities Inc. in Lafayette, Indiana. "We are seeing some liquidation" of bets on higher prices, he said.

Corn futures for July delivery fell by the limit of 30 cents, or 4%, to close at US$7.2925 per bushel on CBOT, the biggest decline since March 15. The most-active contract reached a 33-month high at US$7.8875 on April 11.

About 9% of the crop was planted as of April 24, compared with 46% a year earlier, the government said this week.

Soy fell as overseas and domestic demand eased, analysts said. Futures for July delivery dropped 31 cents, or 2.2%, to close at US$13.535 a bushel in CBOT. Earlier, the price touched US$14.005, the highest since April 11.

Corn is the biggest US crop, valued at US$66.7 billion in 2010, followed by soy at US$38.9 billion, government figures show.