Corn futures jumped to the highest in almost a month, after surging the most allowed by the exchange yesterday, on concern an expansion in plantings in the U.S. won’t be enough to rebuild global stockpiles.
May-delivery corn advanced as much as 5.9 percent to $7.34 a bushel, the highest price for the most-active contract on the Chicago Board of Trade since March 4. The contract traded at $7.31 a bushel at 2:52 p.m. in Singapore, set for a 6.1 percent advance this week.
U.S. stockpiles at the beginning of March dropped to 6.52 billion bushels, the lowest for the date since 2007, the country’s Department of Agriculture said yesterday. Farmers will sow corn on about 92.178 million acres (37.3 million hectares), the second-largest since 1944, as profits rise while increasing demand for food and biofuel cuts world stockpiles, the USDA said.
“While the increase in area could be seen as bearish, the figure was overshadowed by the shock in the grain stocks report,” Rabobank Agri Commodity Markets Research said in a report e-mailed today. “The new crops are not expected to replenish inventories to any meaningful extent, keeping prices in the new season high.”
Global food costs climbed to a record in February, a United Nations index showed. High food prices and corruption have spurred unrest in northern Africa and the Middle East this year, triggering the ouster of leaders in Tunisia and Egypt. The U.S. is the biggest exporter of corn, soybeans and wheat.
Dwindling Stockpiles
Even with the expansion in acreage, which may take the U.S. corn harvest to a record, the nation’s stocks-to-use ratio in the 2011-2012 season will still be the second-lowest since the 1995-1996 season, according to Rabobank.
The U.S. is estimated to account for 39 percent of the global corn harvest in the 2010-2011 season, according to a USDA estimate on March 10.
Soybeans for May delivery were little changed at $14.0875 a bushel, after advancing 2.8 percent yesterday, the biggest closing gain since March 17. The contract is set for a 3.7 percent advance this week.
U.S. farmers will cut soybean acres by 1 percent to 76.609 million, the USDA said, close to analysts’ expectations. The nation is estimated to represent 35 percent of the global harvest of the oilseed in the current season, USDA data last month showed. Inventories as of March 1 dropped 1.7 percent from a year earlier to 1.249 billion bushels, the USDA said.
Wheat for May delivery declined 0.5 percent to $7.5925 a bushel in Chicago, after surging 5 percent yesterday. It is set for a 3.6 percent gain this week.
Total wheat acres in the U.S. may expand 8.2 percent from last year to 58.021 million compared with analysts’ expectations of 57.239 million. About 14.427 million acres will be planted with spring wheat, up 5.3 percent from last year, the USDA said.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
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