Sept. 12 (Bloomberg) -- Corn futures rose the most in a week after the U.S. Department of Agriculture’s monthly forecast on production trailed estimates by analysts.
Output will be 12.497 billion bushels this year, the USDA said today in a report. Analysts in a Bloomberg News survey projected 12.554 billion, on average. Last month, the agency forecast 12.914 billion. Yields will drop to a six-year low, the government said. Prices in the U.S., the world’s top exporter, have jumped 56 percent in the past 12 months as adverse weather eroded supplies.
“Supplies are going to be tight this year,” Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago, said in a telephone interview. “Ethanol and livestock producers were buying today because they are worried the crop may get smaller” after the USDA reports harvest results and acreage adjustments in October, he said.
Corn futures for December delivery rose 9 cents, or 1.2 percent, to close at $7.455 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain for a most-active contract since Sept. 2. Earlier, the price fell as much as 1.4 percent.
The average yield in 2011 will drop to 148.1 bushels an acre from 152.8 bushels a year earlier, the USDA said. Last month, the agency projected 153 bushels.
Reserve supplies before the 2012 harvest will be 672 million bushels, down from 714 million forecast a month earlier and this year’s estimated 920 million, the USDA said. The surplus as a percentage of consumption will fall to 5.3 percent, the lowest since 1996, USDA data show.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, government data show.
--Editors: Patrick McKiernan, Millie Munshi
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