BLBG:Corn Rallies as Tightening U.S. Inventories Seen; Soybeans Gain
Corn jumped for the first time in four days on signs that buyers will compete for tightening inventories in the U.S., the world’s largest grower, before farmers harvest a record crop in September. Soybeans also rose.
Stockpiles will total 19.29 million metric tons in the year that ends Aug. 31, down 23 percent from a year earlier, after the worst U.S. drought since the 1930s cut output last year by 13 percent, U.S. Department of Agriculture data show. Global reserves will fall 5.1 percent, the USDA said May 10. Corn for delivery in July, before the harvest, is trading at the widest premium to December futures in seven weeks.
“We’re coming off a short crop, so supplies are tight,” Joseph Vaclavik, the president of Standard Grain Inc. in Chicago, said in a telephone interview. “It seems like old-crop futures will just not be taken down.”
Corn futures for July delivery rose 1.8 percent to close at $6.5275 a bushel at 1:15 p.m. on the Chicago Board of Trade, marking a weekly gain of 2.6 percent. The contract for December delivery fell 0.9 percent to $5.195, widening the spread with July futures to $1.3325, the most since March 28.
Production in the U.S. is forecast by the USDA to rebound this year, with farmers expected to collect 359.2 million tons, a jump of 31 percent. The increase will more than double domestic stockpiles before the 2014 harvest to 50.91 million tons.
Soybean futures for July delivery gained 1.5 percent to $14.485 a bushel. Prices rose 3.5 percent this week, the third straight gain. That’s the longest rally since February.
To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
