Corn Gains for Third Day After U.S. Cuts Harvest Forecasts

By Jae Hur

Oct. 29 (Bloomberg) -- Corn advanced for a third day and soybeans gained after the U.S. Department of Agriculture reduced its production forecast from an earlier prediction because of errors in acreage estimates. Wheat also gained.

The U.S. corn harvest, the world's largest, will be 12.033 billion bushels, 1.4 percent less than estimated on Oct. 10, the USDA said yesterday. The department cut its estimate of harvested acres by 1.3 percent and said inventories on Aug. 31 will total 1.088 billion bushels, down 5.7 percent from an earlier forecast of 1.154 billion.

``The revised numbers for the corn crop continued lending support to the market,'' said Nicholas Chung, senior manager of commodity derivatives at state-owned Korea Development Bank in Seoul. The recovery in global equity markets also provided support to the grain market, easing concerns over global economic growth and demand for food, feed and fuel, he said.

Corn for December delivery rose as much as 17.25 cents, or 4.4 percent, to $4.08 a bushel in electronic trading in Chicago and was at $3.9725 by 2:26 p.m. Singapore time. The price, which gained 1.4 percent yesterday, reached a record $7.9925 June 27.

Soybeans for January delivery gained as much as 31 cents, or 3.5 percent, to $9.19 a bushel and stood at $9.185 by 2:28 p.m. Singapore time. Futures touched a record $16.3675 on July 3.

The U.S. government reduced its estimates of planted and harvested land by 1 million acres, including a decrease of 300,000 acres in Iowa, the biggest producing state, and 200,000 acres in Illinois, the second-biggest grower.

Inventories Fall

The soybean harvest will be 2.938 billion bushels, down 1.5 percent from the Oct. 10 forecast, the USDA said. Reserve inventories before next year's harvest were projected at 205 million bushels, down from 220 million estimated this month.

Wheat for December delivery added as much as 17 cents, or 3.3 percent, to $5.31 a bushel and was at $5.2525 by 2:21 p.m. Singapore time. Wheat has fallen 61 percent from a record $13.495 on Feb. 27.

The price fell 2.9 percent yesterday on signs that the U.S. winter crop was in better condition than last year after rain aided early development of newly planted seeds.

About 65 percent of winter wheat was in good or excellent condition as of Oct. 26, compared with 55 percent a year earlier, the USDA said Oct. 27. About 84 percent of the crop was planted, up from 79 percent a week earlier and 69 percent had emerged from the soil, up from 60 percent last week.

Egypt is seeking at least 55,000 metric tons of wheat at a tender today.

The Baltic Dry Index, the benchmark for commodity shipping costs, dropped below 1,000 for the first time in six years as the lack of credit curbed global trade and shipowners threatened to reject orders. The index fell 6.3 percent to 982 points, the lowest since Aug. 8, 2002.

To contact the reporter for this story: Jae Hur in Singapore at jhur1@bloomberg.net