(Businessweek) – Corn dropped for a second day before a U.S. Department of Agriculture report that will probably show expanding inventories in the U.S. and around the world as production rebounds. Wheat fell.
Corn for July delivery lost as much as 0.5 percent to $6.2975 a bushel on the Chicago Board of Trade, and was at $6.3075 at 10:01 a.m. in Singapore on volume that was 29 percent below the 100-day average. Wheat for July delivery slipped 0.4 percent to $7.0325 a bushel.
U.S. corn stockpiles will surge 167 percent to 51.77 million metric tons (2.038 billion bushels) by next year’s harvest, the biggest expansion since at least 1960, according to a Bloomberg survey. The corn harvest in the U.S. will climb 31 percent to a record 358.7 million tons this season, as the nation recovers from the worst drought since the 1930s, the survey showed. The USDA outlook is due tomorrow in Washington. The U.S. is the biggest grower.
“Trepidation ahead of Friday’s USDA WASDE report is affecting the trade,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report today, referring to the estimates by their initials.
U.S. corn production will still be the most important factor for wheat prices in the year ahead, he wrote. The two grains compete in feed rations for poultry and pigs.
World corn reserves will advance to 150.9 million tons from an estimated 125.9 million tons a year earlier, a separate survey showed. Goldman Sachs Group Inc. says futures will drop to $5.25 a bushel in six months, 17 percent less than the $6.33 closing price in Chicago yesterday.
Soybeans for July delivery was little changed at $13.9125 a bushel in Chicago, after rallying for two days.
