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Corn, Soybeans Plunge as Commodities Slump on Dollar's Rally
This is the internet. You are free to claim "ethanol is driving up corn prices." You would sound pretty foolish, but you are free to do it.Aug. 8 (Bloomberg) -- Corn and soybeans fell to the lowest prices in more than four months, extending this week's declines, as a surging dollar reduced the appeal of commodities as a hedge against inflation.
The dollar rose to the highest since February against a basket of the euro, yen and four major currencies. The UBS Bloomberg Constant Maturity Commodity Index is down 15 percent since June 30, partly because of the dollar's rally. Since reaching records this year, corn is down 35 percent and soybeans are down 28 percent as favorable weather boosted crops.
``When the dollar rallies as much as it has, it reduces the investment in commodities, including grains,'' said Roy Huckabay, an executive vice president for the Linn Group in Chicago. ``People that bought in the past two days, looking for improved demand at lower prices, are getting beat up today.''
Corn futures for December delivery fell 23.75 cents, or 4.4 percent, to $5.1825 a bushel on the Chicago Board of Trade, after earlier falling to $5.1375, the lowest for a most-active contract since March 20. The price dropped more than 11 percent this week, the sixth straight decline since reaching a record $7.9925 on June 27.
Soybean futures for November delivery fell 58.5 cents, or 4.7 percent, to $11.805 a bushel in Chicago, after earlier falling to $11.735, the lowest since April 1. The price tumbled almost 14 percent this week, the biggest weekly drop since July 1988. The most-active contract reached the all-time high of $16.3675 on July 3.