BLBG: Corn Gains to Highest in More Than Two Years on Dollar, U.S. Crop Concerns
Corn futures advanced to the highest price in more than two years on expectations that the U.S. Department of Agriculture may lower for a third straight month its estimate of the nation’s harvest.
Corn for December delivery gained as much as 1.5 percent to $5.9075 a bushel, the highest price for the most-active contract on the Chicago Board of Trade since Aug. 29, 2008. It traded at $5.8925, up 1.3 percent at 2:48 p.m. Singapore time.
Sixteen of 27 traders and analysts surveyed from Chicago to Tokyo on Oct. 29 said corn will climb, and 15 respondents said soybeans will advance, on speculation that the USDA will trim its forecasts for harvests.
“There’s uncertainty around the U.S. harvest,” Michael Pitts, commodity sales director at the National Australia Bank Ltd., said by phone from Sydney today.
The USDA lowered on Oct. 8 its estimate of the corn harvest to 12.664 billion bushels, from 13.16 billion bushels a month earlier, after flooding in June and hot, dry weather in August cut yields in the Midwest, the largest U.S. growing region. Last year’s harvest was a record 13.11 billion bushels. The USDA will release its latest estimate on Nov. 9.
The Dollar Index fell for a third day on speculation that the Federal Reserve will take more credit-easing measures amid signs of a weakening recovery in the world’s largest economy. A declining dollar makes supplies from the U.S. cheaper for holders of other currencies.
Soybeans for January delivery added as much as 0.6 percent to $12.435 a bushel in Chicago, before trading at $12.425 a bushel in Chicago. Wheat for December delivery increased by as much as 1.4 percent to $7.275 a bushel before trading at $7.2725.
The level of the dollar “is the first thing obviously to look at” as the trigger for changes in prices of U.S. supplies, Pitts said. “That’s what’s going to push prices.”
Rains are needed in some U.S. wheat-growing areas to support crop development, Telvent DTN Inc. said in a report dated Oct. 29.
“We’re looking at the forecast in the U.S. and what that means for the crop,” Pitts said. Dry weather may cause “a more adverse growing situation.” he said.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
