Corn futures headed for the biggest gain in two weeks after a U.S. government report showed stockpiles trailed analyst estimates.
Inventories of corn on Sept. 1 were 1.738 billion bushels, the U.S. Department of Agriculture said in a report Friday. The average estimate of analysts in a Bloomberg survey was 1.754 billion. Use of the grain over the previous three months climbed 9.2 percent from a year earlier, the agency said. Soybean stockpiles also trailed forecasts as use rose 55 percent compared with the same period last year.
U.S. corn and soybean exporters have seen increased demand after adverse weather hampered crops in South America. Low prices for the grain may also be enticing livestock producers to increase use of the commodity in feed for animals. The Bloomberg Grains Subindex is heading for a 14 percent loss this quarter amid signs of bumper harvests.
The stockpiles figures show that “maybe our domestic and foreign demand is keeping the corn being used,” Dean Heffta, a senior director at risk-management firm Water Street Solutions in Peoria, Illinois, said in a telephone interview. “Low prices encourage demand across the board.”
On the Chicago Board of Trade, corn futures for December delivery rose 1.5 percent to $3.3425 a bushel as of 11:35 a.m. local time. That would be the biggest gain for the contract since Sept. 16. Soybean futures for November delivery climbed 0.2 percent to $9.525 a bushel.
Wheat dropped after the USDA report showed stockpiles of all varieties on Sept. 1 were 2.53 billion bushels, 21 percent higher than a year earlier. The average estimate of analysts in a Bloomberg survey was 2.44 billion bushels.
Yields of the grain used to make bread and cakes rose to a record 52.6 bushels per acre, nine bushels more than the previous year, the USDA estimated in a separate report released Friday.
In Chicago, wheat futures for December delivery slid 0.1 percent to $3.9875 a bushel.