Chicago Board of Trade corn futures fell for the fifth straight trading session on Monday and were hovering just above a three-year low on harvest of a huge US corn crop and spillover pressure from a proposal to lower the use of corn-based ethanol. Wheat was firm on a weak dollar and unwinding of corn/wheat spreads.
Soyabeans garnered support from brisk export sales of US soyabeans, a weak dollar and a big number for soya in USDA's weekly export inspections report, released on Monday. At 10:03 am CST (1603 GMT), CBOT December corn was down 3 cents per bushel at $4.19, January soyabeans were up 6-1/2 at $12.87 and December wheat was up 2-1/4 at $6.46-3/4.
"Corn is king today, all eyes are on corn. There is left over nervousness from Friday about what the Renewable Fuel Standard will be," said Sterling Smith, futures specialist for Citigroup. The US Environmental Protection Agency (EPA) proposed on Friday to slash federal requirements for US biofuel next year, including corn-based ethanol.
"The corn weakness can be attributed to the EPA proposal," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia. "Outside of that, we do need to recognize that the 2013/14 harvest has replenished global supplies. Even without the EPA announcement, there is little reason for the corn market to show strength at the moment."
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. "This would mean lower demand for corn, just at the time when the US is harvesting a record corn crop. It is likely to take months for a decision to be reached, however," Commerzbank said in a market note.
CBOT soyabean prices were higher due to strong demand but gains were slowed by improving prospects for crops in South America. Informa on Friday estimated next year's US soyabean plantings at a record-high 83.8 million acres, below its previous forecast of 83.9 million but still up from 76.5 million seeded in 2013.
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