Corn Future Decline in Japan, Philippines to Buy Rice as Domestic Demand

Corn futures fell to a two-month low on concern that commodity demand will decline as Japan?s nuclear crisis escalates. Corn futures for May delivery fell 19.5 cents, or 3.1 percent, to close at $6.165 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $6.08, the lowest for a most-active contract since Jan. 12. Yesterday, the grain tumbled 4.5 percent, the most in four months.

The Philippines will auction allocations on March 23 for private companies to import 600,000 tons of rice tariff-free, the state?s National Food Authority said in a newspaper advertisement.

The rice purchases, part of the planned 860,000 tons of imports this year, must be delivered by June 30. Private companies will bid for the so-called ?service charge? that has a minimum floor price of 2 pesos per kilogram, National Food said. Each importer will be allowed to bid for a maximum of 20,000 tons, it said.

The Philippines is seeking to more than halve imports to 860,000 tons this year, from about 2.5 million tons in 2010, amid forecasts for a bigger harvest, National Food Administrator Angelito Banayo said March 7.

The import plan, which calls for the state agency to buy 200,000 tons with the remainder from private traders, will be ?validated in light of rising commodity prices globally? and as ?many countries are in a stockpiling mode,? Banayo said in a March 10 interview.

The Asian nation is struggling to control radiation leaking from a power plant damaged by the magnitude-9 earthquake and tsunami that struck on March 11, killing thousands. Japan is the world?s biggest corn buyer. On Feb. 22, the price in Chicago reached a 31-month high.

?People fear the worst possible outcome in Japan and are liquidating long positions,? said Gregg Hunt, a market analyst at Archer Financial Services Inc. in Chicago. ?The situation has the potential to reduce demand? for supplies from the U.S., he said.

Before today, the price jumped 75 percent in the past 12 months. The U.S. is the world?s leading corn exporter.

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, government figures show.