(The Wall Street Journal) – U.S. corn futures erased earlier losses to trade higher Monday morning, after the U.S. Department of Agriculture cut its forecast for the size of the corn harvest this year.
In its monthly supply-and-demand report, the USDA forecast U.S. corn output of 13.763 billion bushels this year, which would still be a record but is down from its forecast last month of 13.95 billion bushels. Analysts on average had expected the agency to raise its forecast to 14.005 billion bushels, according to an earlier survey by Dow Jones Newswires.
Soybean futures added to their gains after the USDA forecast U.S. soybean output this year at 3.255 billion bushels, below the average expectation of 3.336 billion bushels among analysts.
Wheat futures rose on the USDA’s corn supply estimate. Tighter corn supplies than expected raises demand prospects for wheat, since the two grains are substitutes in animal feed.
Chicago Board of Trade September corn futures were recently up 13 3/4 cents, or 3.0%, at $4.79 1/2 a bushel.
August soybeans, thinly traded ahead of the contract’s expiration on Wednesday, were up 29 1/4 cents, or 2.2%, at $13.70 a bushel. CBOT September wheat was up 11 1/4 cents, or 1.8%, at $6.44 3/4 a bushel.
