Corn Declines After USDA Forecasts Larger Supplies; Soy Gains

By Sungwoo Park and Jae Hur

Jan. 13 (Bloomberg) -- Corn fell to the lowest in a month after the U.S. Department of Agriculture forecast bigger grain supplies than projected in December.

Global corn supplies will jump to 136 million tons, up 9.9 percent from a December forecast, the USDA said yesterday in a report. U.S. soybean stockpiles before the next harvest may increase 9.7 percent to 6.12 million tons.

“The U.S. supply forecast turned out to be bigger than expected,” said C.S. Oh, the head of the overseas futures team at NH Investment & Futures in Seoul. “Supplies aside, the overall market is in the doldrums on concerns over waning demand.”

Corn for March delivery dropped as much as 2.9 percent to $3.6975 a bushel in electronic trade on Chicago Board of Trade, the lowest level since Dec. 12. Futures traded at $3.7175 a bushel at 5:53 p.m. in Seoul after plunging by the 30-cent daily limit yesterday.

Soybeans for March delivery rose as much as 1.5 percent to $9.8075 a bushel and last traded at $9.71 a bushel.

Wheat for March delivery dropped as much as 1.4 percent to $5.6175 a bushel, the lowest level since Dec. 23 and was at $5.635 a bushel at 5:55 p.m. in Seoul.

U.S. soybean stockpiles will reach 225 million bushels in the marketing year that ends on Aug. 31, up from 205 million projected a month earlier, the USDA said.

Corn Inventories

U.S. corn inventories on Aug. 31 will total 1.79 billion bushels, up 21 percent from 1.474 billion forecast in December and 1.624 billion a year earlier, the USDA said. The department also raised its estimate for the 2008 U.S. corn crop, the world’s largest, by 0.7 percent and cut its estimates of U.S. exports, and production of ethanol and animal feed.

In the export market, Egypt plans to buy at least 55,000 metric tons of wheat today, Japan is seeking 157,000 metric tons of milling wheat at a tender on Jan. 15 and Pakistan called bids to import 150,000 tons by Jan. 31.

South Korea is seeking to buy 55,000 tons of corn for feed production after purchasing 110,000 tons of U.S. or South American origin yesterday.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.