Corn Extends Decline as Record U.S. Harvest Seen Boosting Supply

February 24, 2014 05:29 AM
 
corn field

Corn dropped the most in more than five weeks on mounting concern that supplies will expand as production jumps to a record for a second year in the U.S., the world’s largest exporter. Soybeans and wheat advanced.

Production of U.S. corn harvested after Sept. 1 will reach 13.985 billion bushels as yields jump 4.1 percent, the government said Feb. 21. Domestic stockpiles on Aug. 31, 2015, will reach 2.111 billion bushels, 43 percent more than a year earlier. Export sales of grain from the 2013 crop fell 46 percent to 691,439 metric tons in the week ended Feb. 13, from a week earlier, U.S. Department of Agriculture said Feb. 21.

"The market is reflecting a growing supply on top of a record crop last year," Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. "Export demand declined significantly, and now we will have to wait to see if lower prices improve buying interest."

Corn futures for May delivery fell 1.1 percent to $4.54 a bushel at 9:56 a.m. on the Chicago Board of Trade, heading for the biggest drop for the most-active contract since Jan. 15. Prices through Feb. 21 were down 46 percent from an all-time high of $8.49 in August 2012 as rising output boosted inventories.

The interim government of Ukraine, the world’s third- largest corn exporter, said the country needs $35 billion of aid to avoid default as it issued an arrest warrant for fleeing ex- President Viktor Yanukovych for his role in last week’s deadly clashes between protesters and government forces. Ukraine will be the sixth-largest wheat exporter, according to the USDA.

Ukraine exported 606,600 tons of corn in the week ended Feb. 23, up from 494,400 a week earlier, according to APK-Inform Agency today.

"Grain flows should continue now as the country gets back to its normal working schedules," Matt Ammermann, a risk management consultant at INTL FCStone in London, said in a report today.

Soybean futures for May delivery advanced 1.1 percent to $13.745 a bushel on the CBOT, after touching $13.765, the highest price since Sept. 13.

Wheat futures for delivery in May gained 0.5 percent to $6.0875 a bushel in Chicago.

 

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