Corn, Soybeans Head for Monthly Drop as Rain May Improve Crops

By Madelene Pearson and Jae Hur

Jan. 30 (Bloomberg) -- Corn and soybeans headed for a monthly decline on speculation rain in South America will improve crops affected by dry weather.

Corn has dropped 6.6 percent and soybeans are down 1 percent this month. Meteorologists forecast some rain next week in some parts of Argentina and Brazil, the two biggest exporters of corn and soybeans after the U.S.

“It’s all South American weather driven at the moment,” Michael Pitts, director of commodity sales, National Australia Bank Ltd., said from Sydney. “Depending on whether that rainfall eventuates or not, that will really drive the market going forward.”

Corn for March delivery fell 0.5 percent to $3.80 a bushel in Chicago in after-hours electronic trading at 5:14 p.m. Singapore time. The price was down 2.7 percent this week, losing for the fourth straight week. The most-active contract has tumbled 52 percent from a record $7.9925 on June 27.

Soybeans for March delivery were unchanged at $9.705 a bushel, heading for a third straight weekly loss. The price has dropped 41 percent from the all-time high of $16.3675 on July 3.

“Next week the market will focus on the weekend weather in Argentina and Brazil and any purchases from China after the week- long holiday,” said Toshimitsu Kawanabe, an analyst at Central Shoji Co. in Tokyo.

China Purchases

Markets in China, the top buyer of soybeans, are closed this week for the Chinese New Year holiday. There is speculation that China will release 500,000 metric tons of the oilseed from its reserves after the holiday, Kawanabe said.

“If it is true, this will drag down Dalian prices as well as those in Chicago,” Kawanabe said.

Some Argentine fields may get as much as 1 inch (2.5 centimeters) of rain from two storms in the next week, boosting moisture, Allen Motew, a meteorologist for QT Information Systems in Chicago said yesterday. Parts of Brazil will receive three times the normal amount of rain in the next seven days.

Brazil and Argentina have faced a drought just as farmers need water for a critical growth period.

In the export market, South Korea is seeking to buy as much as 55,000 tons of feed wheat at a tender today and Egypt plans to import at least 55,000 tons of wheat today.

Wheat headed for the first monthly drop since October on slumping U.S. sales.

March-delivery wheat rose 0.2 percent to $5.79 a bushel at 5:13 p.m. Singapore time after falling 2.9 percent yesterday. The grain has plunged 57 percent from a record $13.495 on Feb. 27.

U.S. shippers reported net sales of 23,500 tons in the week ended Jan. 22, down 94 percent from the prior week and the lowest since May 22, the Department of Agriculture said in a report yesterday.

To contact the reporters on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net.