Corn futures fall
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."
While the Senate bill is unlikely to gain traction, analysts said, it shows Washington isn't backing ethanol with the same fervor it once did.
"EPA's proposal to reduce the mandate suggests to the market that there's very little support" for ethanol, said Dan Basse, the president of researcher AgResource Co. in Chicago. "There are only two groups fighting for [ethanol]--the farm groups and the ethanol industry--it's everybody against them."
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.
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, said Shawn McCambridge, the senior grains analyst at brokerage Jefferies Bache Commodities LLC in Chicago.
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 increased production in Canada and Australia.
Canada said last week it would produce a record 37.5 million tons of wheat and Australia said its growers would harvest 26.2 million tons, the third-most ever. As production globally increases, demand for U.S. inventories may decline.
Soybean futures for January delivery rose 3 3/4 cents, or 0.3%, to $13.27 1/2 a bushel in Chicago trading. The price gained on signs of strong export demand for supplies from the U.S., the world's biggest shipper of the grain behind Brazil.
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(END) Dow Jones Newswires
December 13, 2013 15:58 ET (20:58 GMT)