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Corn and wheat fall

12/13/2013 @ 2:26pm

Corn futures fell for the second straight session after a group of senators on Thursday proposed a bill that would eliminate a mandate requiring a certain amount of ethanol, which is made from the grain, be blended into gasoline. Wheat also fell while soybeans gained.

Sens. Dianne Feinstein (D., Calif.), Tom Coburn (R., Okla.) and eight co-sponsors introduced the bill, further spurring concerns that demand for corn by ethanol producers would decline after the Environmental Protection Agency last month proposed lowering the mandate. The goal behind the bill would be to allow ethanol to compete on price rather than benefiting from a government-imposed requirement, Sen. Feinstein said in a statement. Renewable Fuels Association President Bob Dinneen called the bill "monumentally stupid."

Investors are also concerned that China may reject more shipments from the U.S. after already denying entry to 180,000 metric tons of the grain that contained an unapproved genetic trait. As fundamentals turned negative, speculative investors are selling contracts and exiting their long positions, or bets that prices would rise, analysts said.

Corn futures for March delivery on the Chicago Board of Trade dropped 8 3/4 cents, or 2%, to $4.25 1/2 a bushel. The December contract that expired today fell 7 3/4 cents, or 1.8%, closing at $4.20 1/2 a bushel.

Wheat futures for March delivery fell 5 cents, or 0.8%, to $6.28 3/4 a bushel on the CBOT. The December contract fell 4 1/4 cents, or 0.7%, to $6.18 1/4 a bushel. The price declined on signs of rising stockpiles in the U.S., the world's biggest exporter of the grain, and increasing production in Canada and Australia.

Soybean futures for January delivery rose 3 3/4 cents, or 0.3%, to $13.27 1/2 a bushel in Chicago trading.

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Write to Tony C. Dreibus at tony.dreibus@wsj.com

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