Corn rebounded from a three-year low in Chicago amid speculation prices already reflect a possible increase tomorrow in the U.S. government’s estimate for the national harvest, the world’s largest.
Farmers may gather a record 14 billion bushels of corn, 1.3 percent more than the U.S. Department of Agriculture’s September prediction and up 30 percent from 2012, according to a Bloomberg survey of 36 analysts. Prices slumped 40 percent this year on expectations for a bigger crop. The USDA is scheduled to release monthly supply and demand estimates.
"History tells us that when going into a major report and the majority is leaning in one direction, the results will have to be even more convincing to keep the market moving in the direction of the crowd," Paul Georgy, president of Allendale Inc., wrote in a comment.
Corn for delivery in December rose 0.2 percent to $4.2225 a bushel on the Chicago Board of Trade before a pause in trading at 7:45 a.m. local time. The grain earlier slipped as much as 0.2 percent to $4.2025, the lowest price for a most-active contract since Aug. 25, 2010.
The 14-day relative strength index for corn, a gauge of whether a commodity is overbought or oversold, fell to 30.4 yesterday. Readings below 30 indicate a potential impending rebound to some analysts who study technical charts. The RSI for wheat dropped to 32.3.
"Technical indicators are oversold in corn and wheat," Georgy said.
Corn is leading declines this year in the S&P GSCI gauge of raw materials as output in the U.S. recovers from last year’s drought, the nation’s most severe since the 1930s. The USDA canceled the October report during the partial government shutdown that ended last month.
"Expectations that the USDA will make a sizable upward revision toward U.S. corn-crop estimates have been the primary factor weighing on that market," Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone.
Soybeans for delivery in January slipped 0.1 percent to $12.54 a bushel and wheat for delivery in December rose 0.2 percent to $6.545 a bushel.
Milling wheat for delivery in January traded on NYSE Liffe in Paris rose 0.7 percent to 204.75 euros ($273.15) a metric ton. Prices expressed in dollars dropped from yesterday’s close as the euro fell against the greenback after the European Central Bank cut its main interest rate to a record low.