BLBG: Corn, Wheat Gain After Slump as U.S. Data Signals Excess Supply
By Supunnabul Suwannakij
April 1 (Bloomberg) -- Corn, soybeans and wheat advanced as investors snapped up the commodities after tumbling yesterday on the U.S. government report showing larger-than-expected inventories and excess supply.
A record 2009 crop lifted corn stockpiles 11 percent from a year ago to the largest March level since 1987, the Department of Agriculture said yesterday. Soybean stockpiles were 1.27 billion bushels, 5.5 percent more than the average estimate of analysts in a Bloomberg News survey. Wheat reserves expanded 30 percent as rising global output eroded demand for U.S. grain.
Investors bought futures after prices slumped overnight, Tetsu Emori, a commodity fund manager at Astmax Co., said by phone from Tokyo today. “Fundamentals remain negative” and gains may be short-lived as falling oil prices are clouding market sentiment, he said.
“We haven’t seen fundamental support that made the prices rally today after being oversold last night,” Ben Barber, a futures adviser at Bell Commodities Ltd. said from Sydney.
Excess supply will continue to put pressure on the grain markets and prices may retreat later, Barber said.
Wheat futures for May delivery rose as much as 1.6 percent to $4.575 a bushel at 4:01 p.m. Singapore time, after touching a five-month low of $4.50 a bushel yesterday, the lowest since Oct. 7. The grain has dropped 18 percent this year.
Farmers may seed wheat on 53.8 million acres, the U.S. Department of Agriculture said in a report yesterday. That topped the average estimate of 53.3 million acres in a Bloomberg News survey of 27 analysts.
Production Increases
U.S. farmers may plant a record acreage of soybeans this year and the second-biggest area of corn since 1946, after sowing the fewest acres with winter wheat since 1913, the USDA said yesterday.
Soybeans for May delivery in Chicago added 0.4 percent to $9.45 a bushel at 4:08 p.m. Singapore time, after falling as low as 0.5 percent earlier today. The price fell 3.4 percent yesterday, the most since December. Prices declined 10 percent in the first quarter, the most since the third quarter of 2008.
Corn futures for May delivery rose 0.7 percent to $3.4725 a bushel in Asia. The price touched $3.4425 yesterday, the lowest level since Oct. 6, and has dropped 16 percent this year.
Growers may increase corn planting by 2.7 percent to 88.798 million acres (35.9 million hectares), up from 86.482 million last year, the USDA said yesterday after surveying about 86,000 farmers earlier this month. Analysts in a Bloomberg survey expected 89.1 million.
‘Surprisingly High’
“The corn stocks figure was surprisingly high coming in at the upper end of analyst expectations,” Rabobank said in a research note. Corn inventories jumped to 7.694 billion bushels from 6.954 billion the previous year, topping the 7.504 billion expected in a Bloomberg survey.
South Korea’s plan to buy 275,000 tons of corn partially helped boost the price, Bell Commodities’ Barber said.
South Korea’s Major Feedmill Group today called bids to buy 220,000 tons of corn for arrival between August and September. The Korea Corn Processing Industry Association will buy 55,000 metric tons of corn for food production for arrival by August 10.
To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net
