Corn and Soybean Prices Down as US Dollar Rally

Corn fell the most this month and soybeans dropped to the lowest price in almost three weeks as a rally in the dollar eroded prospects for U.S. exports and reduced the investment appeal of commodities.

The dollar advanced against all its major peers after MF Global Holdings Ltd. was suspended from conducting new business with the New York Federal Reserve and the Chicago Mercantile Exchange limited the firm’s customer trading to liquidation only. The Standard & Poor’s GSCI Index of 24 commodities fell as much as 1.6 percent amid concern European leaders will struggle to contain the region’s debt crisis.

“Concern about erosion of demand is weighing on the markets,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The uncertainty about European debt and the MF Global situation boosted the dollar and shifted the flow of money away from riskier assets.”

Corn futures for December delivery fell 2.2 percent to $6.405 a bushel at 10:36 a.m. on the Chicago Board of Trade. A close at that price would be the biggest decline since Sept. 30. Before today, the grain rose 11 percent this month on speculation that demand would improve.

Soybean futures for November delivery declined 1.4 percent to $12.0825 a bushel, after touching $12.035, the lowest since Oct. 11.

The U.S. is the largest producer and exporter. Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, USDA data show.

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