Thursday, September 12, 2013

Corn, wheat prices dip after US lifts supply hopes


Corn and wheat futures extended losses after US farm officials lifted estimates for supplies of both grains – in contrast to a cut to expectations for inventories of soybeans, which maintained small price gains.

The US Department of Agriculture, in its much-watched monthly Wasde crop report, surprised investors by raising its estimate for the domestic corn harvest by 80m bushels to a record 13.843bn bushels, rather than making the small downgrade they had expected.

The revision reflected a upgrade of 0.9 bushels per acre, to a four-year high of 155.3m bushels per acre, in the yield estimate, with USDA officials noting that the crop was in far better condition than a year ago "despite soil moisture concerns".

Although the US had used up more corn in the newly-finished 2012-13 season than officials had thought, in making ethanol and in exports, the extra output prompt the USDA to lift its estimate for domestic inventories at the close of 2013-14 by 18m bushels.

It also, unexpectedly, raised its forecast for world inventories, highlighting too lower consumption in Canada, which is enjoying a bumper wheat harvest.

Canada upgrade

Indeed, the USDA cited an upgrade to its estimate for the Canadian wheat crop to a 22-year high of 31.5m tonnes as a key reason behind its decision to lift its estimate for world wheat production to a record 708.9m tonnes.

"Production is raised 2.0m tonnes for Canada as cool July weather supported flowering and reproduction, and abundant soil moisture and favourably warm, dry weather in August aided grain fill and maturity across the Prairie provinces," the department said.

With the estimates for European Union and Ukraine harvests also upgraded, the estimate for world stocks at the end of this season was lifted by 3.3m tonnes to 176.3m tonnes.

This included a small upgrade to the forecast for US inventories, reflecting increased imports from Canada.

See the original article >>

No comments:

Post a Comment

Follow Us