Corn headed for its biggest monthly advance since June 2008 on concern that global demand will outpace falling U.S. output. Rice was set for its best monthly gain in more than two years as floods damaged Asian crops. Corn for December delivery in Chicago lost 0.3 percent to $5.7725 a bushel, paring this month’s gain to 16 percent. The most-active contract is set for a fifth monthly gain. “Fundamentally, corn will remain bullish after the U.S. government cut its forecast for crop production,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo. Prices will also be supported by the outlook for higher corn and soybean imports by China, he said. World corn production for the year ending June 2011 will be lower than forecast last month because of a reduced U.S. crop, resulting in smaller-than-estimated inventories, according to the International Grains Council. The global corn crop will be 814 million metric tons, 1.2 percent less than last month’s 824 million-ton forecast, the council said yesterday. Production in the U.S., the world’s biggest grower and exporter, will be 323 million tons, down 3.3 percent from September’s estimate, it said. Hot weather in August curbed output in the country. World corn inventories will probably total 125 million tons at the end of the crop year on June 30, 6 million tons less than predicted last month, the London-based IGC said. World corn demand will outstrip production by 3.2 percent, reducing stockpiles for a second year, it said. Shrinking Inventory U.S. output will fall 3.4 percent from a year earlier, reducing reserve inventories before the 2011 harvest to the lowest since 1997, the Department of Agriculture said Oct. 8. Soybeans for January delivery declined as much as 0.8 percent to $12.265 a bushel and last traded at $12.285 by 2:21 p.m. Singapore time. The oilseed has climbed 11 percent this month, advancing for the fourth straight month. The price reached $12.4875 yesterday, the highest level since Sept. 4, 2008. Wheat for December delivery fell 0.7 percent to $7.13 a bushel, the first drop in six days. The contract has risen 5.8 percent this month. The grain has surged about 48 percent since the end of June after drought destroyed Russian crops, prompting the country to ban exports. The International Grains Council left its global wheat- production forecast unchanged at 644 million tons while raising the consumption estimate by 1 million tons. Stockpiles will total 181 million, down 1.1 percent from September’s estimate, the statement shows. Rough-rice for January delivery fell 1.1 percent to $14.91 per 100 pounds after touching $15.27 yesterday, the highest since Jan. 4. The most-active contract, which rose for a fourth month, has gained 19 percent this month, the biggest monthly advance since February 2008. Rice has jumped 54 percent since the end of June as flooding ravaged crops in Thailand and Vietnam, the world’s two biggest exporters. To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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