Corn, Soybeans Fall as Gains Seen Excessive, U.S. Exports Drop

By Jae Hur

Aug. 22 (Bloomberg) -- Corn declined for the first day in five and soybeans fell as investors bet their gains early this week were excessive and as U.S. weekly export sales dropped. Wheat also slid.

Corn had advanced 12.4 percent this week before today and soybeans gained almost 11 percent, heading for a second straight weekly gain on concern the crops were seeded late. Flooding in Iowa and Illinois, the biggest U.S. producers of both crops, delayed spring seeding in May and June, and some fields had to be replanted.

``It's purely a technical adjustment,'' Kazuhiko Saito, a commodity strategist at Interes Capital Management, said today in Tokyo by telephone. A decline in weekly export sales of U.S. corn and soybeans also put pressure on the market, he said.

Corn for December delivery fell as much as 1.1 percent to $6.1075 a bushel in after-hours electronic trading on the Chicago Board of Trade and traded at $6.1275 as of 2:53 p.m. in Singapore.

The contract rose 3.8 percent yesterday after touching $6.25, the highest since July 21. The price has soared 69 percent in the past year, reaching a record $7.9925 on June 27.

Soybeans for November delivery dropped as much as 11.75 cents, or 0.9 percent, to $13.3625 a bushel and last traded at $13.415. Futures gained 3.7 percent yesterday after touching $13.70, the highest since Aug. 1. The most-active contract has surged 59 percent in the past 12 months, reaching a record $16.3675 on July 3.

Late Plantings

Corn and soybeans rose yesterday on speculation that late plantings of U.S. crops have increased the risk of damage from early frosts before the harvests start next month. Frost damage before the harvest would curb yields by damaging corn kernels and soybean pods.

U.S. export sales of corn almost halved to 196,602 tons for the week ended Aug. 14 from the previous week, the Department of Agriculture said yesterday. The sales were less than the 250,000 tons to 400,000 tons expected by Citigroup.

Soybean sales experienced net cancellations of 81,131 tons, the second straight week of negative sales, as the crop approaches the end of its marketing year on Aug. 31. Citigroup had expected sales of 100,000 tons to 300,000 tons.

Commodities headed for their biggest weekly gain in 33 years as oil traded near a three-week high and a weakening dollar revived demand for raw materials as alternative assets.

The Reuters/Jefferies CRB Index of 19 commodities added 3.7 percent to 405.92 in New York yesterday. A settlement at that level today would mark a 6.2 percent gain for the week, the most since July 1975. The dollar headed for its first weekly decline against the euro since July 11, while oil traded near $121 a barrel after jumping more than $5 yesterday.

Bull Market

``Until either a lot of supply comes on stream or the economy collapses, the bull market will continue,'' according to investor Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel.

Wheat for December delivery lost as much as 1.7 percent to $9.0625 a bushel and stood at $9.08 as of 3:00 p.m. Singapore time. The contract, which added 2.5 percent yesterday, has gained 26 percent in the past year, touching a record $13.495 on Feb. 27.

Before today, wheat gained 8.6 percent this week, extending gains for the second week.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net