Corn Rises as Farmers May Limit Crop Sales After 50% Price Drop

By Jeff Wilson

Oct. 27 (Bloomberg) -- Corn rose the most in a week, reversing an earlier drop to a one-year low, on speculation that a 50 percent plunge in prices will slow crop sales by farmers.

Cash corn prices in parts of the U.S. Midwest have fallen more than 50 percent from highs reached four months ago. Farmers who already got government subsidy checks can afford to hold off further crop sales, analysts said. Winds of as much as 55 miles an hour may have damaged some unharvested upper Midwest fields yesterday, according to QT Information Systems Inc. in Chicago.

``Farmers are not selling grain and that has firmed cash prices,'' said Christian Mayer, a market analyst for Northstar Commodity Investments LLC in Minneapolis. ``Livestock producers and ethanol makers are pushing bids up to get some supplies.''

Corn futures for December delivery rose 12.5 cents, or 3.4 percent, to $3.8525 a bushel on the Chicago Board of Trade, the biggest gain since Oct. 20. Earlier, the price touched $3.64, the lowest since Oct. 25, 2007. The most-active contract has dropped 52 percent from a record $7.9925 on June 27.

About 29 percent of the corn crop was collected as of Oct. 19, up from 21 percent a week earlier and less than the 58 percent of a year earlier, the U.S. Department of Agriculture said last week. That figure will be updated later today.

Production will total 12.2 billion bushels, second only to last year's 13.1 billion-bushel harvest, the USDA said Oct 10.

Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, government figures show.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.