Corn Gains a Second Day After USDA Lowers Inventory Estimate

Corn futures rose, extending yesterday’s advance, after the U.S. government lowered its estimate of the nation’s inventory as demand expands faster than expected. Wheat also rose.

Corn for July-delivery advanced as much as 0.7 percent to $3.795 a bushel in after-hours electronic trading on the Chicago Board of Trade and traded at $3.7925 a bushel at 11:50 a.m. Singapore time. The contract closed 1.8 percent higher yesterday, the steepest rise since April 28.

The U.S. Department of Agriculture yesterday estimated the nation’s corn stockpile will be 1.74 billion bushels by Aug. 31, down from a forecast of 1.94 billion bushels a month earlier, as higher exports offset lower domestic demand for feed grains.

Corn futures “got a positive kick from old-crop numbers,” Luke Mathews, an agricultural commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today, referring to the U.S. inventory forecast.

Still, output in the U.S., the world’s largest grower and exporter, will expand in the year beginning September, helping push global stockpiles to 154 million tons next year, from 147 million tons this year, the USDA said.

Wheat for July delivery was little changed at $4.9375 a bushel after trading between $4.9225 and $4.9475. The grain “is lacking any real direction” and is tracking corn prices, Mathews said.

The USDA yesterday said global wheat production will exceed
demand for a third straight year in 2010-2011, pushing stockpiles higher to 198 million tons, from 193 million tons this year.

Soybeans for July delivery rose as much as 0.4 percent to $9.6975 a bushel before trading at $9.6825. Global output may fall 3 percent to 250 million tons in the 2010-2011 year from 258 million tons this year, the USDA said in a report yesterday. Imports by China, the world’s largest buyer, may rise to 49 million tons, from 46 million tons, it said.

Luzi Ann Javier
Source: Bloomberg