BLBG:Corn Climbs on Planting Delays in the U.S., Maintaining Premium Over Wheat
Corn advanced for a second day, with the most-active contract maintaining a premium over wheat, on speculation that the U.S. corn crop will be smaller than previously estimated because of planting delays.
Corn for July gained as much as 1.1 percent to $7.4475 per bushel on the Chicago Board of Trade, and was at $7.38 at 10:39 a.m. in Singapore while wheat was at $7.3275 after losing 0.1 percent. Corn climbed 0.6 percent yesterday to $7.365 as wheat ended at $7.3375. That’s the first time since 1984 that corn’s been more expensive, according to Bloomberg data.
The corn crop faces “potential for shortfall” because of the delays, Goldman Sachs Group Inc. said in a report on June 6. Seeding may be as much as 2 million acres (809,370 hectares) less than “original intentions,” resulting in a decline of as much as 250 million bushels, the bank said. The U.S. is the biggest corn shipper. Planting has been delayed by wet weather.
“Supply-demand factors continue to support corn prices,” Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, said by phone today. “When you look at wheat, you obviously have favorable weather.”
About 5.8 million acres, or 6 percent of the farmland that growers told the government they planned to sow with corn, were unplanted as of June 5, the U.S. Department of Agriculture said on June 6.
“Old crops for corn are tighter than those of wheat,” said Luke Mathews, a Sydney-based analyst at Commonwealth Bank of Australia. “They are going to be revised lower.”
World inventories of corn before this year’s Northern Hemisphere harvests will be 121.46 million metric tons, according to an average forecast of 15 analysts surveyed by Bloomberg News. The previous USDA forecast is 122.19 million tons. Those of wheat will be 182.06 million tons, from 182.20 million tons in a previous forecast.
The USDA is scheduled to release its estimates tomorrow at 8:30 a.m. in Washington.
Soybeans for July delivery dropped 0.3 percent at $13.8925 per bushel. Soybean seeding was 68 percent completed, below the five-year average of 82 percent.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
