Corn Falls as Lower Crude-Oil Price May Slow Demand for Ethanol
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By Jeff Wilson
Dec. 9 (Bloomberg) -- Corn fell to a one-month low on speculation that demand for ethanol made from the grain will slow after a plunge in energy prices.
Crude oil fell to a two-month low after a U.S. government report showed gasoline stockpiles rose last week to the highest level since April. Total daily fuel demand in the four weeks ended Dec. 4 was down 3 percent from a year earlier. Average ethanol production slipped in September to 725,000 barrels a day from 727,000 in August, the Energy Department said Nov. 30.
“Grain prices are following energy prices lower today,” said Greg Wagner, a senior market analyst for AgResource Co. in Chicago. “September ethanol production was quite disappointing, given that producers had their best margins this year.”
Corn futures for March delivery fell 1.5 cents, or 0.4 percent, to $3.835 a bushel on the Chicago Board of Trade, after touching $3.79, the lowest level for a most-active contract since Nov. 9.
Prices are down 8.1 percent this month, after surging 27 percent in the previous three months as heavy rain delayed the U.S. harvest. Corn is down 5.8 percent this year as U.S. farmers are forecast to harvest the second-biggest crop ever.
Corn, valued at $47.4 billion in 2008, is the biggest U.S. crop, government data show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
Last Updated: December 9, 2009 15:42 EST
