Demand worries sink corn futures
U.S. corn futures fell Tuesday, settling at a fresh one-week low, amid concerns that demand is slumping.
CBOT March corn ended down 5 1/4 cents, or 0.7%, to $7.29.
Corn prices declined for the third consecutive day, as traders continue to take profits after prices climbed to eight-week closing highs Thursday. Corn is falling ahead of the U.S. Department of Agriculture's monthly world supply-and-demand report, due to be issued at noon EST on Friday.
Many traders expect federal forecasters to cut their projections for U.S. corn demand, resulting in a higher forecast for domestic stockpiles of the grain.
"Corn usage is likely to deteriorate further," said John Kleist, a senior analyst with brokerage EBOT Trading.com in Lakemoor, Ill.
Weaker corn demand could come from ethanol producers, the livestock industry or foreign buyers. Several ethanol companies have idled plants in recent weeks, and export demand for corn has been weak for months, as foreign buyers have tended to purchase supplies from South America instead.
Some traders also think demand for corn used in animal feed--an estimate the USDA boosted last month--could be weaker than expected.
Corn traders are looking beyond potential crop losses in Argentina, the world's third-largest exporter of corn, Mr. Kleist said. The Argentina crop problems aren't enough to offset the U.S. problem with demand, Mr. Kleist said.
Traders are also shedding some risk, partly because rainfall forecast for Argentina during the weekend and next week could provide a late-season boost to crop yields.
U.S. wheat futures closed at a 3 1/2-week low, declining for a fourth straight day on sluggish export demand and technically based selling by speculative traders.
The March wheat contract ended down 5 1/2 cents, or 0.7%, at $7.57 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat dropped 9 3/4 cents, or 1.2%, to $8.07 1/4 a bushel, while MGEX March wheat finished down 5 1/4 cents, or 0.6%, at $8.41 3/4 a bushel.
U.S. soybean futures settled higher Tuesday, fueled by worries about Argentina crop production and concerns that U.S. stockpiles remain tight.
CBOT soybeans for March delivery finished up 6 3/4 cents, or 0.5%, at $14.95 1/2 a bushel.