(Reuters) – U.S. corn slid to a three-year low on Tuesday, falling for a sixth consecutive session as plans to lower the use of corn-based ethanol in the United States and rising global supplies dragged on prices.
Soybeans stretched gains into a second day as strong demand underpinned the market, although favourable planting weather in Argentina checked the rise in prices.
Chicago Board Of Trade spot-month corn fell 0.1 percent to $4.11-1/2 a bushel by 0307 GMT, after hitting a three-year low of $4.11 earlier in the session.
January soybeans gained 0.1 percent to $12.89-1/4 a bushel, after Monday’s 0.5 percent gain, while wheat added 0.2 percent to $6.43-3/4 a bushel.
“Definitely, there has been sentiment shift in corn and we are looking at a price of $3.80 a bushel,” said one Melbourne-based commodities analyst. “I don’t know who would be buying corn now when you know it is going to be cheaper tomorrow.”
The weight on the market was stemming from the harvest of a likely record large U.S. corn crop and concerns use of the grain may be trimmed if the required amount of ethanol to be used in fuel is reduced.
The U.S. Environmental Protection Agency (EPA) proposed on Friday to slash federal requirements for U.S. biofuel next year, including corn-based ethanol.
It was the first cut to renewable fuel targets written into a 2007 law, and seen as a clear win for oil refiners and a loss for biofuel producers. The EPA did not propose a specific 2014 volume for ethanol made from corn. But its proposed change in advanced biofuels implies a corn ethanol 2014 mandate of 12.7 billion to 13.2 billion gallons, down from the previous mandate of 14.4 billion gallons.
There was additional pressure on corn after news that China had cancelled a cargo of U.S. corn because it contained Syngenta AG’s unapproved Agrisure Viptera corn.
Chicago soybeans rose due to strong demand but gains were slowed by improving prospects for crops in South America.
A dry spell in Argentina should allow soy planting to progress rapidly in the next week now that the ground is sufficiently moist, a local meteorologist said.
Winter and the first days of spring were dry in Argentina, but abundant rains fell on the main crop areas in October. Soy farmers now need time to work the soil.
Informa on Friday estimated next year’s U.S. soybean plantings at a record-high 83.8 million acres (33.9 million hectares), below its previous forecast of 83.9 million but still up from 76.5 million seeded in 2013.
Commodity funds sold a net 12,000 CBOT corn contracts on Monday, trade sources said. They sold 1,500 wheat and bought 4,000 soybean.
