Corn Snaps Longest Rally in 8 Months on U.S. Crop Outlook

October 9th, 2014

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Category: Grains, Oilseeds

SoybeanCorn450x299Low50(Bloomberg) – Corn dropped, snapping the longest rally in eight months, on speculation the U.S. government will raise its production estimate for the world’s top grower and exporter. Wheat fell the most in a week.

Farmers in the U.S. will harvest a record crop of 14.54 billion bushels after rain and cool weather boosted yield potential, according to a Bloomberg survey. That’s higher than the Department of Agriculture’s forecast of 14.395 billion bushels, the biggest ever. The USDA will update its estimate tomorrow. Prices have dropped 19 percent this year.

“Volatility is likely to remain low for the rest of the week until the release of the monthly USDA world supply and demand report on Friday,” Australia & New Zealand Banking Group Ltd. analysts, including Paul Deane, wrote in a report today. “Markets are anticipating further upward revisions to U.S. corn and soybean yields.”

Corn for December delivery fell as much as 0.7 percent to $3.4075 a bushel on the Chicago Board of Trade, and was at $3.4225 by 4:56 a.m. Futures rose 7 percent in six sessions through yesterday, the longest run since Jan. 28, as demand for the grain to make ethanol increased.

Futures trading volumes were 40 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

Soybeans for November delivery climbed 0.5 percent to $9.3975 a bushel after dropping 0.6 percent yesterday. U.S. production may rise to a record 3.99 billion bushels, higher than last month’s USDA forecast of 3.913 billion, the survey showed. The oilseed has slumped 27 percent this year.

Wheat in the U.S. Plains will benefit from rains this week, improving moisture in drier areas of Oklahoma and Colorado, Commodity Weather Group LLC in Bethesda, Maryland, said in a report yesterday.

The contract for December delivery fell as much as 1.3 percent to $5.01 a bushel, the biggest drop since Oct. 1, before trading at $5.025. Prices rose in the previous six sessions for the longest rally since Aug. 6.

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