Sept. 2 (Bloomberg) -- Corn futures rose the most in a week and soybeans extended their rally on speculation that hot, dry weather in the U.S., the world’s largest grower and exporter, damaged crops more than forecast by the government.
Production of corn will drop to a three-year low of 12.35 billion bushels, researcher and broker INTL FCStone Inc. said yesterday. That’s below last month’s U.S. Department of Agriculture estimate of 12.914 billion. FCStone forecast a soy crop of 3.03 billion bushels, less than the USDA’s estimate of 3.056 billion and last year’s harvest of 3.329 billion.
“U.S. crop forecasts are falling, and that will continue to support the markets,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “Until we hear actual farmer harvest results, the uncertainly about supplies keeps end-users and speculators buying on price dips.”
Corn futures for December delivery rose 21.5 cents, or 2.9 percent, to close at $7.60 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since Aug. 26. Prices have rallied 70 percent in the past year, including a three-year high of $7.93 on June 9. For this week, prices fell 0.9 percent, the first drop since July 29, on concern that higher prices will slow demand.
Soybean futures for November delivery climbed 11.25 cents, or 0.8 percent, to $14.4575 a bushel in Chicago, capping a weekly gain of 1.6 percent, the third straight. On Aug. 31, the most-active contract touched $14.65, the highest since July 2008. Prices are up 43 percent from a year ago.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, USDA data show.
All U.S. markets and government offices are closed on Sept. 5, in observance of Labor Day.
--Editors: Steve Stroth, Millie Munshi
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