Rong Feiwen (’03) reports for Bloomberg on a global plunge in corn futures after US corn farmers announced they would plant their largest crop in six-decades to meet an ethanol-driven rise in demand. The effects of the announcement reached as far as Dalian’s commodity exchange:

Corn prices in China, the world’s second largest grower of the grain, also fell as traders speculated a further drop in global markets may prompt domestic users to import the grain.

The contract for delivery in September on the Dalian Commodity Exchange slumped as much as 3.4 percent to 1,630 yuan ($211) a ton, and settled at 1,654 yuan.

“Domestic corn is much cheaper for now, but if prices keep falling, imports will become an option for large users,” said Nie Ben, research manager at Liao Ning Cifco Futures Co. in Dalian. “So far the reaction has been more psychological.”

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