Corn dropped, paring a weekly increase, on concern that yesterday’s jump to the highest level in more than three weeks will hurt demand for U.S. supplies. Corn for delivery in December declined as much as 0.7 percent to $7.68 a bushel on the Chicago Board of Trade and was at $7.6875 at 2:48 p.m. in Singapore. Futures closed 5 percent higher at $7.7325 a bushel yesterday after reaching $7.76, the highest price since Sept. 17. The most-active contract is poised to gain 2.8 percent this week. Futures jumped after a U.S. Department of Agriculture report showed global stockpiles will drop more than expected as the worst U.S. drought in more than 50 years cuts output by the most since 1996. Inventories on Oct. 1 will be 117.27 million metric tons, down from 123.95 million predicted a month ago, the USDA said. U.S. export sales in the week ended Oct. 4 probably plunged to less than half the commitments of the same period a year earlier, showed a Bloomberg survey of four analysts. “There’s some early profit-taking in the corn market following the very strong gains,� Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. “This set of USDA numbers will refocus the market on the very tight supply situation.� U.S. export sales of corn were estimated in the range of 200,000 tons to 450,000 tons, down from 326,917 tons in the week ended Sept. 27 and 1.26 million tons a year earlier, the survey showed. The USDA is scheduled to release its report on sales at 8:30 a.m. in Washington today. UBS AG raised its forecasts for corn, wheat and soybeans. Corn may average $7.50 a bushel in the first quarter, up from an earlier forecast of $7.23, as harvest revisions may cut stockpiles, Wayne Gordon and Joe Dewhurst said in a report. Wheat may average $8.40 a bushel, from an earlier call of $7.78, and soybeans average $16.17 a bushel, up from $15.66, they wrote. Wheat for December delivery lost 0.8 percent to $8.7875 a bushel, snapping a four-day rally. Futures rose 1.9 percent yesterday, the most since Sept. 28, and are heading for a 2.5 percent weekly advance. Soybeans for November delivery dropped 1.2 percent to $15.305 a bushel, extending the decline in the most-active contract to 1.4 percent this week. To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source