(Bloomberg)– Corn dropped to trade near the lowest level in four years on speculation yields in the U.S. will be better than the government forecast last month and amid waning concerns of frost damage this week.
U.S. farmers may gather 14.276 billion bushels of corn, based on a survey of 32 analysts and traders by Bloomberg News, more than the U.S. Department of Agriculture’s August forecast for a record 14.032 billion bushels. The risk of crop damage from freezing weather later this week is very low, Commodity Weather Group wrote in a forecast today.
Corn for December delivery fell 0.9 percent to $3.45 a bushel on the Chicago Board of Trade by 7:15 a.m. Prices dropped to $3.4375 on Sept. 4, the lowest for a most-active contract since June 2010.
“The operators are expecting a USDA report that will generously revise production estimates upwards on Thursday,” Paris-based farm adviser Agritel wrote in a market comment. “What is more, the concerns related to low temperatures expected for the end of the week are fading somewhat.”
The USDA is set to update its crop estimates on Sept. 11. Corn rated in good or excellent condition accounted for 74 percent of the crop as of Sept. 7, unchanged from a week earlier and compared with 54 percent at the same time last year, the USDA reported yesterday.
U.S. corn yields may be 170.7 bushels an acre, compared with the USDA’s estimate of 167.4, the survey showed.
“Markets remain bearish prior to the USDA report,” U.K. grain trader Gleadell Agriculture wrote in a market comment. “USDA is expected to increase potential corn yield and there are still no significant weather threats to the crop.”
Low Risk
A spell of cold weather on Friday and Saturday may lead to some “light frost” in far northern Indiana and near the border of Minnesota and Wisconsin, Commodity Weather reported. “The risk of a damaging hard freeze is very low,” it said.
Corn and soybeans tumbled 26 percent in the past year as U.S. production is set for a record. Increasing supplies of crops worldwide are helping reduce global food prices, with a United Nations’ index slumping to a six-month low in July.
Soybeans for November delivery declined 0.5 percent to $10.035 a bushel. Soybean production in the U.S., the world’s largest grower, will be 2 percent bigger than the government estimated last month, according to the survey.
Wheat for delivery in December fell 1.1 percent to $5.2775 a bushel in Chicago, while milling wheat for November delivery traded on Euronext in Paris was 0.1 percent lower at 170 euros ($219.385) a metric ton.
