Corn, Soybeans Drop as Global Economic Slowdown Curbs Demand

By Sungwoo Park and Jae Hur

Dec. 5 (Bloomberg) -- Corn and soybeans extended losses, falling to their 15-month lows, on signs the global economic slump is cutting demand for grain from the U.S., the world’s largest exporter. Wheat dropped to the lowest price in 18 months.

A slowing world economy has cooled demand for resources with consumers spending less and credit restrictions hampering imports. Corn lost 8.7 percent this week before today, soybeans dropped 8.2 percent and wheat 13.4 percent, the most since March 21.

“U.S. exports dropped sharply, which shows demand is actually falling,” Chris Yoo, a manager in global commodities at Samsung Futures Inc. said in Seoul. “A global economic recovery may come later than expected.”

Corn for March delivery dropped as much as 1.7 percent to $3.285 a bushel on the Chicago Board of Trade, the lowest price since August 2007. Futures traded at $3.2875 a bushel at 2:48 p.m. Singapore time. Corn has fallen 59 percent from a record $7.9925 on June 27.

U.S. exporters sold about 387,000 tons of corn in the week ended Nov. 27, down 17 percent from a week earlier and 10 percent below the four-week average, the U.S. Department of Agriculture said yesterday in a report. Soybean exports tumbled 54 percent last week to a low for the marketing year began on Sept. 1 and wheat exports fell to the smallest total since the end of May, the USDA data showed.

Soybeans for January delivery sank as much as 1.1 percent to $8.02 a bushel, the lowest since August 2007, and last traded at that level. The most-active contract has fallen 51 percent from a record $16.3675 on July 3.

Chinese Imports

Soybean imports by China, the largest buyer, may increase as local buying to boost reserves stokes demand for supplies from abroad, a state-owned market information provider said.

Demand for soybeans climbed to 52.5, from 51.9 last week, according to an index of agricultural products managed by the China National Grain and Oils Information Center. The index ranks products from 0 to 100 and was in an e-mailed report today.

May-delivery soybeans on the Dalian Commodity Exchange fell by the 5 percent limit to 2,898 yuan ($422) a ton. Soybean oil for the same month delivery also fell by the 5 percent limit to 5,616 yuan a ton.

Meantime, Pakistan, Asia’s third-biggest wheat producer, called bids to import 500,000 metric tons of the grain to build stockpiles and meet a shortage. Bids will be opened on Dec. 20, the state-run Trading Corp. of Pakistan said in a statement.

Wheat for March delivery declined 3.5 cents, or 0.7 percent, to $4.825 a bushel at 2:45 p.m. Singapore time after earlier touching $4.805, an 18-month low. The price is down 64 percent from a record $13.495 in February.

To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net