Corn Falls on Speculation Good Weather, Prices Boost U.S. Crop

By Sungwoo Park

Aug. 11 (Bloomberg) -- Corn declined, after reaching a four- month low last week, on speculation the U.S. may raise its production forecast for the crop as record prices spurred a boost in acreage and good weather helped plants.

The U.S. Department of Agriculture will tomorrow project a corn crop of 11.939 billion bushels, according to the average estimate of 23 analysts surveyed by Bloomberg News. That's up 1.9 percent from the USDA's July estimate of 11.715 bushels. Since reaching records this year, corn is down 35 percent and soybeans are down 28 percent as favorable weather boosted crops.

``Many are expecting the USDA report to turn out to be a bearish factor for corn price because good weather improved crop condition in the wake of June flooding,'' Han Sung Min, a manager at the international marketing division of Korea Exchange Bank Futures Co. said from Seoul. ``In addition, grains remain pressured by the stronger dollar.''

The dollar rose on Friday to the highest since February against a basket of the euro, yen and four other major currencies, reducing the appeal of commodities as a hedge against inflation.

Corn for December delivery fell as much as 3.25 cents, or 0.6 percent, to $5.15 a bushel, on the Chicago Board of Trade, and traded at $5.1550 at 12:30 p.m. in Singapore. Futures on Aug. 8 touched the lowest level since March 20 and dropped 11.4 percent last week, the biggest such decline since July 1996. Corn has dropped from a record $7.9925 on June 27.

Soybeans for November delivery lost as much as 5.5 cents, or 0.5 percent, to $11.75 a bushel and last traded at $11.80. The most-active contract is down from the all-time high of $16.3675 on July 3.

Wheat for December delivery declined as much as 3.25 cents, or 0.4 percent, to $7.87 a bushel and last traded at $7.9075 a bushel. The most-active futures have dropped 41 percent since reaching a record $13.495 on Feb. 27.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.