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Corn & Wheat Drop, Is Rebound Probable?

January 16, 2013 at 2:17 by Vladimir Vyun

Corn retreated today following the longest rally in a year. Wheat also dropped. The grains may yet rebound as weather threatens crops in America.

South America experiences drought and forecasters predict that it may continue for 10 more days. Plants in the United States may be hurt by cold weather. Adverse weather conditions will likely lead to smaller harvest and that should prop up prices.

The report of US Department of Agriculture released on January 11 was very bullish for the agricultural sector of the commodity market. The USDA said that inventories of corn as of December 1st reached the lowest level in nine years for that period. The Department noted:

While stiff competition has limited U.S. corn exports, higher domestic disappearance leaves the balance sheet historically tight and is expected to support continued strong and volatile prices well into summer, particularly in the domestic cash markets.

Both corn and wheat for delivery in March fell $0.0075 (0.1 percent) as of 2:14 GMT on CBoT today. Corn traded at $7.2975 per bushel and wheat was at $7.8200 per bushel.

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