Corn Lingers Near Four-Year Low on Global Supply Outlook

July 23rd, 2014

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Category: Grains

(Bloomberg) – Corn traded near a four-year low on speculation that favorable weather in the U.S. will aid crops in the biggest grain exporter and amid an outlook for rising global supplies.

Corn fell 24 percent in the past 12 months, wheat shed 19 percent and soybeans dropped 16 percent amid signs of growing supply. A second straight bumper U.S. corn crop will lift global reserves to the highest since 2000, the U.S. Department of Agriculture said July 11. World wheat stocks at the end of the 2014-15 season may climb to the highest in three years, it forecast.

“The weather is great, yields are fantastic, production is good,” Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney, said by phone today. “You’d need a real shift in the weather” to increase prices, he said.

Corn for December delivery was little changed at $3.685 a bushel on the Chicago Board of Trade by 7:07 a.m. local time, after earlier touching $3.6725, the lowest for a most-active contract since July 2010.

U.S. corn production will reach 13.86 billion bushels, the second-highest on record, USDA data show. About 76 percent of the crop was in good or excellent condition in the week ended July 20, the highest for this time of year since 2004, the agency said this week. Temperatures in the Midwest will cool later this week, preventing stress for plants, MDA Weather Services said yesterday.

“The very good crop conditions for corn and soybeans in the U.S. and the continuation of ideal weather conditions keep on feeding a scenario of record production,” Paris-based farm adviser Agritel wrote.

Global Stockpiles

World wheat stockpiles at the end of 2014-15 will total 189.54 million metric tons from 188.61 million tons forecast in June and 184.29 million tons a year earlier, the USDA estimates.

Wheat for September delivery gained 0.4 percent to $5.2675 a bushel in Chicago after earlier touching $5.2025 a bushel, the lowest level for most-active futures since July 2010. Milling wheat for November traded on Euronext in Paris was 0.8 percent higher at 179.50 euros ($241.73) a ton.

Soybeans for November delivery rose 0.3 percent to $10.61 a bushel in Chicago after earlier dropping to $10.55, the lowest since October 2010.

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