Corn Declines for a Second Day After U.S. Inventory Estimate

Corn futures fell for a second day after the U.S. Department of Agriculture forecast that the nation’s stockpiles will be bigger than analysts expected.

Corn for December delivery fell 0.5 percent to $3.9325 a bushel on the Chicago Board of Trade at 11 a.m. in Singapore after trading between $3.925 and $3.975. Futures advanced 4.5 percent in the two days before the USDA issued the latest supply estimates on July 9.

The USDA estimates were “not as bullish as expected,” Commonwealth Bank of Australia said in a report published today.

The U.S. agency also raised its estimate for U.S. soybean production to 3.345 billion bushels, from 3.31 billion bushels in June, as the area harvested was forecast to expand to a record 78 million acres (31.6 million hectares).

Soybeans for November delivery lost 0.5 percent to $9.485 a bushel. It traded between $9.4675 and $9.5575 a bushel.

September-delivery wheat was 0.3 percent weaker at $5.3625 a bushel on the Chicago Board of Trade, after swinging between gains and losses.

Wheat futures earlier gained as much as 0.7 percent as dry weather persisted in Russia and Kazakhstan, raising concern that global supply may be smaller than estimated by the USDA.

The USDA cut on July 9 its estimate on global stockpiles of wheat at the end of the 2010-2011 marketing year by 6.9 million tons, or 3.5 percent, from a month earlier as it pared its output estimates for some exporters including Russia and Kazakhstan on expectations that dry weather will curb yields.

The market is getting “support from the USDA’s” forecast, Michael Pitts, director for commodity sales at National Australia Bank Ltd., said by phone from Sydney today.

Source: Businessweek.com