Feb. 24 (Bloomberg) -- Corn declined, set for a weekly loss, after the U.S. government maintained its outlook that the country’s farmers will boost acreage to the most since 1944, adding to global supply as Ukraine forecasts higher shipments.
Planting will rise to 94 million acres (38 million hectares), Joe Glauber, chief economist at the U.S. Department of Agriculture, said at a conference yesterday. Exports from Ukraine, vying with Argentina to be the second-largest shipper, will jump 20 percent as farmers expand planting, said Andrew Druzyaka, adviser at the State Food & Grain Corp. of Ukraine.
“Supply looks strong this year, driven by higher plantings,” Tobias Merath, head of commodity research at Credit Suisse AG private banking unit, wrote in a report today. “This is weighing on prices and given the prevailing over-valuation and negative technical trend, price risks should remain skewed to the downside in the coming weeks.”
May-delivery corn declined 0.6 percent to $6.385 a bushel on the Chicago Board of Trade by 1:25 p.m. in London. Futures are set for a 1 percent loss this week.
Inventories in the U.S., the largest grower and exporter, may rebound as growth in biofuel demand slows, helping relieve some volatility that has roiled markets, Glauber said.
In Ukraine, shipments may rise to 15 million metric tons in 2012-13, from 12.5 million tons a year earlier, as farmers sow corn in some winter-wheat areas damaged by dry weather followed by frost and last year’s bumper crops boost carry-over stockpiles, Druzyaka of Ukraine’s State Food & Grain Corp. said in an interview yesterday. That would be a record, according to USDA data.
“When you do look at these numbers, they’re showing that global production is looking strong for the season ahead,” said Michael Creed, an agribusiness economist at National Australia Bank Ltd. While bigger acreage in the U.S. and higher shipments from Ukraine have “some bearish influence on prices, there’s always that associated production risk and its impact on prices,” he said, referring to potential weather-related crop losses.
A continued decline in corn prices “will be a catalyst for alternative crops,” Neil Burgess, a commodity analyst at Westpac Banking Corp., said in an e-mail.
Soybeans for May delivery gained 0.1 percent to $12.845 a bushel, heading for a weekly gain of 0.8 percent.
Wheat for delivery in May was down 0.7 percent to $6.3675 a bushel, taking the weekly decline to 1.7 percent. Milling wheat for November delivery was 1.2 percent lower at 191.25 euros ($256.4) a ton on NYSE Liffe in Paris, down 1.3 percent for the week.
Russia, set to be the world’s third-largest wheat exporter, may ship about 22 million tons in the year beginning July 1, unchanged from this year, as the damage to winter crops is unlikely to curb the exportable surplus, Arkady Zlochevsky, president of the Russian Grain Union, said Feb. 22.
“This additional supply is quite bearish” for prices, National Australia Bank’s Creed said. “The global wheat market is pretty comfortable.”
--With assistance from Whitney McFerron in Chicago, Alan Bjerga in Washington and Joe Richter in New York. Editors: John Deane, Nicholas Larkin
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