January 30, 2009
Corn and soy futures drop as rain may relieve crops in South America
Corn and soy futures fell on speculation that forecast rain in South America may relieve crops affected by drought in the past month, wheat also declined.
Corn and soy futures fell for a second day this week, reversing Wednesday's (Jan 28) gains. Brazil and Argentina are the biggest exporters of corn and soy after the US.
Tokyo's Central Shoji Co. analyst, Toshimitsu Kawanabe said on Thursday (Jan 29) the market was under pressure from easing dry weather concern for crops in Argentina and Brazil.
Kawanabe said with few fresh fundamental developments, people are watching demand for soy after the Chinese New Year holiday as markets in China are closed this week for the vacation.
Corn for March delivery fell 1.6 percent to US$3.7825 a bushel in electronic trading on the CBOT.
The contract gained 1.9 percent on speculation US President Barack Obama's stimulus plan will stoke economic growth and demand for grain. Soy for March delivery fell 0.7 percent, to US$9.7575 a bushel.
Chicago's QT Information Systems director of meteorology, Allen Motew said about 10 percent of Argentina's growing region will receive up to 2 inches of rain in the next seven days, providing limited drought relief.
Motew noted that reduced humidity and wind currents led to lower rain forecasts for the next two weeks.
Wheat for March delivery dropped 1.1 percent to US$5.89 a bushel, after rising 1.8 percent.
The US House of Representatives passed Obama's proposed US$819 billion economic stimulus package which is aimed at lifting the economy out of a recession through tax cuts and US$604 billion in spending.