Corn Declines as Investors Judge Yesterday’s Gain as Excessive

By Luzi Ann Javier

Oct. 13 (Bloomberg) -- Corn fell from its highest level in more than three months as investors judged yesterday’s 5.9 percent jump as excessive. Soybeans and wheat also declined.

Corn surged to as much as $3.835 a bushel on the Chicago Board of Trade yesterday, the highest price for the most active contract since June 30, on concern freezing weather will end the growing season in the southern Midwest. Soybeans climbed 3.6 percent yesterday.

“It’s always difficult to build on a 5 percent gain,” Luke Mathews, commodity strategist at Commonwealth Bank of Australia in Sydney, said by phone today. “A temporary pull- back in prices wouldn’t be unexpected.”

Corn for December delivery fell as much as 1.8 percent to $3.7425 a bushel in after-hours electronic trading and was at $3.755 a bushel at 10:50 a.m. Singapore time.

The grain’s relative strength index, a momentum measure used by some investors to determine if price are about to rise or fall, was at 72 yesterday. A reading of more than 70 is seen by some investors as a signal prices may fall.

December delivery wheat dropped 1.6 percent to $4.865 a bushel after surging as much as 6.1 percent yesterday to the highest level since Sept. 1.

Soybeans for November delivery fell 1 percent to $9.8875 a bushel. The contract gained as much as 3.8 percent yesterday to the highest price for the most-active contract since Aug. 31.

Weather Risk

Freezing weather remains a risk for yields in the U.S., the world’s largest grower and exporter of the oilseed and corn, and prices may resume their rally later this week, Commonwealth’s Mathews said.

Forecast rain “should help support prices, particularly if we have continuing weakness in the U.S dollar on top of that,” he said.

A weaker dollar makes U.S. grain cheaper for international buyers. The Dollar Index, which tracks the value of the greenback against six major currencies, was little changed at 76.196 after falling 0.3 percent yesterday.

Wet, snowy weather is expected in the central U.S. corn and soybean belt in the first half of the week, DTN Meteorlogix LLC forecast yesterday.

Freezing temperatures last weekend may cut U.S. corn production by as much as 230 million bushels, or 1.8 percent of the 13.018 billion bushels forecast by the Department of Agriculture on Oct. 9, William Fordham, the president of C&S Grain Market Consulting in Ohio, Illinois said.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net