November 2, 2010
 
CBOT corn and soy drops on improved South American crops
 
 
CBOT corn dropped from a two-year high and soy fell for the first time in six sessions as rain in South American improved crop prospects.
 
Some fields in Brazil got as much as 7.1 centimeters of rain in the past three days, and more precipitation in the next two weeks will boost depleted top-soil moisture, World Weather Inc said. Rains were forecast to return to Argentina on November 6.
 
''There was enough rain to alleviate dryness concerns for the next few weeks,''said an analyst. ''With rain in the forecast, there is not much incentive to buy.''
 
Corn futures for December delivery fell US$0.048, or 0.8%, to close at US$5.773 a bushel on CBOT. Earlier, the price reached $5.908, the highest level for a most-active contract since August 2008.
 
Soy futures for January delivery dropped US$0.01 to close at US$12.35 a bushel. On October 28, the price reached US$12.488, the highest level since September 2008, on rising demand from China, the world's biggest consumer.
 
The US is the world's largest grower and exporter of corn and soy, followed by Brazil and Argentina. In October, corn rose 17% and soy gained 12%, partly because dry weather slowed planting in South America.
 
The dollar's rebound eroded demand for some commodities, the analyst said. The greenback rose as much as 0.6% against the euro, erasing a decline of 0.5%, after US manufacturing expanded more than what was forecasted in October.
 
''The dollar has rallied, and that cut investor buying interest,'' the analyst said. ''The rally is beginning to act a little tired.''
 

Corn is the largest US crop, valued at US$48.6 billion in 2009, followed by soy at US$31.8 billion, according to US government figures.

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