Corn Heads for Weekly Drop as Brazil Lifts Crop Output Forecast

By Luzi Ann Javier

Aug. 7 (Bloomberg) -- Corn, poised for a weekly decline, slumped after Brazil, the world’s second-largest exporter of the grain, raised its output forecast. Wheat climbed.

Futures dropped as much as 2.4 percent after Brazil raised its estimate for this year’s corn harvest to 50.27 million metric tons this year from a July forecast of 49.45 million tons, as continued rains aided crops in Center-West states of Mato Grosso and Goias, the country’s Agriculture Ministry said yesterday.

“Any upward revision in production in Latin America will be negative for prices,” Toby Hassall, a research analyst at CWA Global Markets Pty. Ltd. said by phone from Sydney.

Corn for December delivery slumped as low as $3.3225 a bushel in after-hours electronic trading on the Chicago Board of Trade, and was at $3.36 a bushel at 1:10 p.m. Singapore time. The most-active contract is headed for a 3.9 percent weekly loss, the eighth in the past nine weeks.

Argentina, the world’s third-largest shipper of corn, may lift the restrictions on corn and wheat exports after meeting with exporters next week, as it seeks to encourage farmers to boost production of both crops.

The government will meet with Cargill Inc. and producers next week to discuss a new deal on farm exports, Cabinet Chief Anibal Fernandez said in Buenos Aires yesterday.

Wheat gained after a Japanese agriculture official said the government was considering boosting imports this fiscal year as wet weather threatens to cut output on the northern island of Hokkaido, the nation’s largest producing area.

Japanese Imports

Japan, Asia’s largest wheat importer, will probably import more than the 4.91 million tons planned in the year to March 31, Shirara Shiokawa,director at the grain trade division of the Ministry of Agriculture, Forestry and Fisheries, said yesterday in an interview.

Wheat for December delivery gained 0.4 percent to $5.305 a bushel at 1:05 p.m. Singapore time. The December contract, which closed 5.1 percent lower yesterday, is headed for a 4.5 percent loss this week.

Soybeans for November delivery, after the U.S. harvest, lost as much as 1 percent, to $10.20 a bushel, before trading at $10.28 at 1:02 p.m. Singapore time. The most-active contract is poised for a 4.7 percent gain this week, the second weekly rise.

In the U.S., the world’s biggest soybean grower and exporter, “we’re expecting very strong yields, but it is still uncertain as to how the crop will ultimately go,” CWA’s Hassall said. “Risks remain until you’ve got the product harvested,” he said.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net