Corn Prices Fall on Speculation China Will Raise Interest Rates

Corn prices fell for a sixth day in Chicago and soybeans slid the most in six weeks on speculation China will raise interest rates, curbing borrowing by buyers of crops. Wheat also declined.

China will raise interest rates by 0.25 percentage point before 2010 ends, HSBC Holdings Plc said today. The government last month increased borrowing costs for the first time since 2007. Stronger Chinese demand helped soybeans to jump 24 percent this year, and corn is up 37 percent after China?s first major purchases of the grain from the U.S. since 2001.

?Speculation on an interest-rate hike in China soon has also led to sharp price markdowns of agricultural commodities,? Eugen Weinberg, head of commodity research at Commerzbank AG in Frankfurt, said in a report.

Corn for March delivery fell 10.75 cents, or 1.9 percent, to $5.6725 a bushel at 1:14 p.m. London time on the Chicago Board of Trade. The most-active contract is down 5.7 percent this week.

Soybeans for January delivery slumped 34.5 cents, or 2.6 percent, to $13.045 a bushel. Prices dropped as much as 3.8 percent, the most since Oct. 1. The oilseed has gained 1.6 percent this week.

Wheat for March delivery fell 12.5 cents, or 1.7 percent, to $7.315 a bushel. Milling wheat for January delivery traded on NYSE Liffe in Paris slid 1.8 percent to 217.25 euros ($298.20) a metric ton.