Wednesday, 18 March 2015 02:03
CHICAGO: Chicago Board of Trade corn futures fell 2 percent to the lowest levels since October on Tuesday, pressured by technical selling and plentiful global grain supplies, traders said.
The most-active May contract fell for the fourth straight session, with declines of 5 percent during that stretch the largest since mid-January. New-crop December corn fell below the psychological threshold of $ 4 for the first time in more than a month.
Corn earlier knocked out its low of $ 3.73-3/4 per bushel reached on Jan. 30, triggering another round of selling. The session low of $ 3.70 was the lowest point since Oct. 21.
US farmers were expected to reduce sowings in the planting season already underway in the southern Plains. But existing supplies remained robust while Ukraine was selling corn to major user China and there was talk South America corn was cheap enough for shipments to work into the southeastern US hog and poultry markets later this year.
Open interest surged by nearly 25,000 corn contracts during Monday’s sharp downturn in corn prices, suggesting new short, or bearish, positions, CME Group data showed.
US farmers will likely use less nitrogen fertilizer this season with the cost sky-high even though the price of natural gas, the key ingredient to make it, is down 40 percent from last year. The reduction in usage should hit corn plantings more than other crops, since nitrogen is the key booster of corn yields.
China, the world’s second largest corn consumer, has booked over 600,000 tonnes of corn from Ukraine this year and more deals are expected as Beijing’s stockpiling dries up supplies and boosts domestic prices.
Copyright Reuters, 2015