BLBG:Soybeans Rise on Bets U.S. Crop Will Shrink; Corn Drops on Shfit to Wheat
Soybeans rose on speculation that the U.S. harvest declined more than the government estimated after dry weather during the summer lowered yields. Corn fell as producers of livestock feed shifted to cheaper wheat.
The U.S. Department of Agriculture cut its forecast on this year’s soybean crop for a second straight month on Nov. 9, saying production will fall 8.5 percent to 82.9 million metric tons. Some fields from Minnesota to Tennessee were the driest ever in August, data from National Climatic Center show.
“The soybean crop may get smaller,” Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. “There is some demand surfacing after the recent drop in prices.”
Soybean futures for January delivery rose 0.7 percent to close at $11.755 a bushel at 1:15 p.m. on the Chicago Board of Trade. Yesterday, the price touched $11.67, the lowest for a most-active contract since Oct. 10. The oilseed, down 3.7 percent this week, has dropped 16 percent this year.
Last year, the U.S. was the world’s leading exporter of soybeans and corn.
On the CBOT, corn futures for December delivery fell 1.1 percent to $6.385 a bushel. This week, the price dropped 2.6 percent, ending a five-week rally.
The average U.S. cash price of corn rose to a premium of almost 40 cents a bushel above wheat yesterday, the most since Sept. 22, data from the Minneapolis Grain Exchange show. U.S. exporters sold 251,858 tons of corn in the week ended Nov. 3, down 56 percent from a year earlier, according to the USDA.
“We have exhausted the buying interest for corn,” Shawn McCambridge, a senior grain analyst at Jefferies Bache Commodities LLC, said in a telephone interview. “We will see some substitution of wheat in livestock rations.”
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government data show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
