Oct. 6 (Bloomberg) -- Corn rose for a second day in Chicago, extending the biggest advance in more than a month, on speculation the U.S. crop will be smaller than forecast and demand for feed and ethanol may increase.
The harvest in the U.S., the biggest global corn grower and exporter, may total 12.519 billion bushels this year, Informa Economics Inc. said in a report yesterday, cutting its estimate from 13.62 billion bushels on Sept. 23.
“Harvest pressure in the U.S. remains a headwind,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report today. Informa’s estimate also supported prices, he said.
December-delivery corn rose 0.7 percent to $6.10 a bushel on the Chicago Board of Trade by 2:14 p.m. Paris time. The grain closed 3 percent higher yesterday, the biggest jump since Aug. 26, after plunging 23 percent in September.
U.S. production of ethanol, forecast by the government to account for about 40 percent of the nation’s corn-crop use, rose last week by the most since the week ended Aug. 5, according to an Energy Department report. Output increased 2.6 percent to 863,000 barrels a day in the week ended Sept. 30, rebounding from its lowest level since Sept. 24, 2010.
In China, a bumper corn crop estimated at 181.5 million metric tons will do little to add to inventories, with demand estimated at 181.3 million tons, Abah Ofon, an analyst at Standard Chartered Plc, said in a report yesterday.
China will “relish the recent collapse in grain prices” after the government announced the release of 3.7 million tons of corn from state reserves to boost domestic supply and cool inflation amid strong demand for feed grains, Ofon said.
Wheat for December delivery rose 1.2 percent to $6.33 a bushel. The grain dropped 23 percent last month. Milling wheat for November delivery traded on NYSE Liffe in Paris advanced 1.5 percent to 188 euros ($249.53) a ton.
Soybeans for November delivery climbed 1 percent to $11.7525 a bushel in Chicago.
Soybean yields in the U.S. are likely to decline, while exports to China, the largest importer of the oilseed, will remain “fairly resilient” as the Asian nation expands pig farming to meet rising meat demand, Ofon said. Soybeans and corn are the main ingredients in feeds for pigs and poultry.
--With assistance from Rudy Ruitenberg in Paris, Phoebe Sedgman in Melbourne and Mario Parker and Jeff Wilson in Chicago. Editors: John Deane, Sharon Lindores
-0- Oct/06/2011 13:19 GMT
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