White and Yellow Corn Prices Fall as Rain in Growing Areas

Corn prices in South Africa, the continent?s largest producer of the grain, fell as a forecast for rain in growing areas bolstered the prospects for yields. The South African Weather Service predicted heavy rainfall across the provinces of Mpumalanga, the biggest producer of yellow corn, and Free State, where most of the nation?s white- corn crop is grown.



White corn for March delivery, the most active contract on the South African Futures Exchange in Johannesburg, fell 4 rand, or 0.3 percent, to end trade at 1,369 rand ($198) a metric ton in Johannesburg. Meal made from the grain is the country?s staple food.

Yellow corn for March delivery dropped 5 rand, or 0.3 percent, to 1,445 rand a ton. The grain is used mainly as animal feed in South Africa. The U.S. and Argentina are among the world?s biggest corn exporters.

The intraday price for Corn Products Intl Inc has moved above its 200 period 30 minute moving average of 33.33. CPO is near 33 bucks now. The general trend in CPO has been down recently.

Already below support of $33 might make it difficult in the near-term.

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Corn and soybean futures jumped to the highest prices in two years as plans by the Federal Reserve to stimulate the economy sent the dollar lower, boosting demand for commodities as a hedge against inflation.

The dollar fell to an 11-month low against a basket of six currencies after the Fed said yesterday it would buy an additional $600 billion of Treasuries through June and will keep interest rates low for an ?extended period.? The Standard & Poor?s GSCI Index of 24 commodities rose to the highest level since Oct. 3, 2008. Corn has jumped 58 percent since the end of June and soybeans rose 41 percent on reduced global production.

?It?s like the Fed is printing $600 billion of new money, and that increases inflationary expectations,? said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. ?It a rush of new investment money into hard assets like commodities.?

Corn futures for December delivery rose 9 cents, or 1.5 percent, to close at $5.90 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $5.9575, the highest level since Aug. 29, 2008. Prices surged 17 percent in October after hot, dry weather reduced the size of the U.S. crop.

Soybean futures for January delivery rose 37.25 cents, or 3 percent, to close at $12.7475 a bushel in Chicago, after earlier touching $12.79, the highest level for a most-active contract since Sept. 3, 2008. The commodity jumped 12 percent in October on rising U.S. export sales to China.

The U.S. is the world?s largest grower and exporter of both commodities. Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, government figures show, followed by soybeans at $31.8 billion.