US corn slumps on faltering economy, curbing crop demand

Corn declined after reports on job losses and factory orders raised concerns that the economic recovery may stagnate, curbing demand for food, animal feed and alternative fuel.

 

US equities dropped for a fourth day after growth in factory orders reported by the Commerce Department trailed forecasts and ADP Employer Services said the number of jobs fell by 298,000 in August. Corn in Chicago has slumped 3.6 percent in three days after losing 5.7 percent in August as cool, wet weather improved US crop prospects.

 

Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said grains and other commodities were under pressure from slumping stock markets.

 

 

Soy for November delivery was up 0.3 percent at US$9.54 a bushel after dropping the previous three days. The price touched US$9.425 yesterday, the lowest since Aug. 19.

 

Production of corn, the largest US crop, will total 13.02 billion bushels, David Smoldt, a vice president at West Des Moines, Iowa-based FCStone Group Inc. said Sept. 1. That compared with the company's August forecast for 12.814 billion bushels for 2009.

 

Last month, the US Department of Agriculture predicted 12.761 billion bushels. US farmers harvested 12.101 billion bushels last year and a record 13.1 billion bushels in 2007, government data show.

 

Farmers will harvest a record 3.266 billion bushels of soy, or 2.1 percent more than the USDA's Aug. 12 forecast of 3.199 billion, FCStone said. Yields may rise to 42.6 bushels compared with 42.4 bushels estimated by the government.

 

The USDA is set to release its second survey-based crop forecasts on Sept. 11 at 8:30 a.m. in Washington.

 

Soy may slump to US$8.50 a bushel as farmers in the US harvest a record crop, according to FCStone's Smoldt. The drop could happen at the end of September or start of October on the "realization that we have a large crop", he said. Smoldt said Sept. 2.

 

In the export market, South Korea is seeking 55,000 tonnes of corn for feed production.

 

Wheat for December delivery in Chicago was little changed at US$4.855 a bushel at 1:06 p.m. Singapore time, slumping for a third day on signs of weak demand for supplies from the US, the world's biggest exporter. The price touched $4.8075 on Aug. 31, the lowest level since Dec. 8.

 

Western Australia, the nation's biggest wheat grower and exporter, needs significant rainfall to meet grain-output forecasts, according to CBH Group. Australia, the world's fourth-largest wheat shipper, relies on rain at this time of year to boost yields in winter-grain crops ahead of the harvest from November.

 

Michael Musgrave, operations manager for the nation's top wheat exporter said more areas are getting dry and CBH is "quite concerned" for about one-third of the wheat-growing area.