BLBG:Corn Declines as U.S. Acreage Expands, Ukraine Shipments Seen Increasing
Corn dropped, set for a weekly loss, after the U.S. government maintained its outlook that the country’s farmers will boost acreage to the most since 1944, adding to global supply as Ukraine forecasts higher shipments.
May-delivery corn declined as much as 0.7 percent to $6.3825 a bushel on the Chicago Board of Trade, before trading at $6.405 at 2:47 p.m. Singapore time. Futures are set for a 0.7 percent loss this week.
Planting will rise to 94 million acres (38 million hectares), Joe Glauber, chief economist at the U.S. Department of Agriculture said at a conference yesterday. Exports from Ukraine, vying with Argentina to be the second-largest shipper, will jump 20 percent as farmers expand planting, said Andrew Druzyaka, adviser at the State Food & Grain Corp. of Ukraine.
“These are significant bearish influences over corn and the grain complex in general,” Adam Davis, a commodity trader at Merricks Capital Services Pty., said in an e-mail.
Inventories in the U.S., the largest grower and exporter, may rebound as growth in biofuel demand slows, helping relieve some volatility that has roiled markets, Glauber said.
In Ukraine, shipments may rise to 15 million metric tons in 2012-2013, from 12.5 million tons a year earlier, as farmers sow corn in some winter-wheat areas damaged by dry weather followed by frost and last year’s bumper crops boost carry-over stockpiles, said Druzyaka of the State Food & Grain Corp. of Ukraine in an interview yesterday. That would be a record, according to USDA data.
‘Production Risk’
“When you do look at these numbers, they’re showing that global production is looking strong for the season ahead,” said Michael Creed, an agribusiness economist at National Australia Bank Ltd. While bigger acreage in the U.S. and higher shipments from Ukraine have “some bearish influence on prices, there’s always that associated production risk and its impact on prices.” Creed said, referring to potential “weather-related” loses to the crops.
A continued decline in corn prices “will be a catalyst for alternative crops,” Neil Burgess, a commodity analyst at Westpac Banking Corp., said in an e-mail.
Wheat for delivery in May dropped 0.4 percent to $6.385 a bushel, taking the weekly decline to 1.4 percent. Soybeans for May delivery was little changed at $12.8275 a bushel, heading for a weekly gain of 0.7 percent.
Russia, set to be the world’s third-largest wheat exporter, may ship about 22 million tons in the year beginning July 1, unchanged from this year, as the damage to winter crops are unlikely to curb the exportable surplus, Arkady Zlochevsky, president of the Russian Grain Union, said Feb. 22.
“This additional supply is quite bearish” for prices, National Australia Bank’s Creed said. “The global wheat market is pretty comfortable.”
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
