Corn Prices Drop on Rising Fuel Costs

Corn prices fell on speculation that rising energy costs will put a damper the global economy, cutting demand for food and livestock feed. Soybeans rose on the possibility that South American shipments may drop.

Crude oil rose to a 29-month high on concern that unrest in Libya will spread to other north African and Middle East petroleum exporters. U.S. equities dropped as data signaled that growth in wages may fail to keep up with fuel expenses. Corn has gained 90 percent in the past year as demand jumped.

“The surge in energy prices will reduce consumer- purchasing power,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “Traders are anxious to bank recent profit with all the uncertainty in the Middle East.”

Corn futures for May delivery fell 8.75 cents or 1.2 percent, to $7.28 a bushel at 1:15 p.m. on the Chicago Board. The grain rose 0.8 percent this week, the fifth straight gain. The most-active contract reached a 31-month high of $7.4425 on Feb. 22.

Soybean futures for May delivery rose 2 cents, or 0.1 percent, to $14.14 a bushel, capping a 2.8 percent weekly gain, the first since Feb. 4. On Feb. 9, the price reached a 30-month high of $14.5575.

Cargill Inc., Archer Daniels Midland Co., Alfred C Toepfer International BV, may be prevented from shipping oilseeds from Argentina after the government yesterday stripped them of their status as registered exporters amid a dispute over taxes.

Dry weather threatens about 20 percent of the Argentina soybean crop, and too much rain may slow harvesting in Brazil, according to the Commodity Weather Group LLC.

“Uncertainty about Argentina exports could give a boost to U.S. exports,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “Weather in South America is not adding to world production.”