By Sungwoo Park
March 12 (Bloomberg) -- Corn advanced after the U.S. government unexpectedly increased its estimate of the amount of grain that will be used to make ethanol. Soybeans and wheat also gained.
Increased biofuels production will more than offset falling export demand, reducing domestic supplies on Aug. 31 to 1.74 billion bushels, from 1.79 billion forecast last month, the U.S. Department of Agriculture said yesterday in a report. Traders surveyed by Bloomberg News expected an increase to 1.81 billion.
“The prospects for corn are quite bright down the road, given increasing use of the grain in ethanol blending as well as improving ethanol margins,” said Han Sung Min, a manager at the international marketing team of Korea Exchange Bank Futures Inc. in Seoul. “Soybeans are also gaining along with corn on the optimism.”
Corn for May delivery was up 0.4 percent at $3.66 a bushel on the Chicago Board of Trade at 10:48 a.m. Seoul time. The most-active contract yesterday fell 2.9 percent, the biggest loss since Feb. 27. Futures reached a record $7.9925 in June.
About 3.7 billion bushels will be used to make ethanol in the marketing year that began Sept. 1, up from an estimated 3.6 billion forecast in February, the USDA said. A year earlier, 3.026 billion bushels were used for the biofuel.
Soybeans for May delivery added 0.7 percent to $8.6825 a bushel at 10:49 a.m. Seoul time. Futures reached a record $16.3675 in July. Wheat for May delivery gained 0.7 percent to $5.1175 a bushel at 10:50 a.m. Seoul time.
To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net
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