Tuesday, July 22, 2008

Corn sinks to the lowest in more than three months

From MarketWatch:

Corn falls below $6; EPA decision on ethanol mandate due Wednesday

Corn futures fell for a third day Tuesday, dropping to the lowest in more than three months, as the rising dollar led broad declines in commodities.

..."The dollar is a major bearish factor today," said Elaine Kub, an analyst a commodity information provider DTN. "There really wasn't any support. The strong move during June wasn't sustainable."

Corn had rallied more than 20% in June on concerns that the Midwest flooding could have damaged cornfields. But prices took a sharp turn this month. The corn contract is now 25% lower than its record high of $7.96 hit on June 27.

Latest data from the U.S. Department of Agriculture indicated that corn crop developments, hurt by the flooding, were lagging behind the previous year. The USDA crop progress report, released late Monday, showed that 34% of the corn crop was pollinating as of July 20, down from 72% a year earlier and below the five-year average of 60%.

Ethanol mandate
The Environmental Protection Agency will release its decision Wednesday on whether to approve a petition that requested to reduce the nation's biofuels use, mostly corn-based ethanol, by 50% this year....MORE