Corn Holds at $4.03 after Record Crop
Corn traded near the lowest level in almost four years as an outlook for a record harvest in the U.S., the biggest producer, spurred a bear market slump. Wheat rallied after the biggest drop in 15 months.
Corn for December delivery traded at $4.0675 a bushel on the Chicago Board of Trade at 1:51 p.m. in Singapore from $4.0625 yesterday. Prices dropped for a fifth day yesterday, sliding as low as $4.03, the lowest for a most-active contract since August 2010.
Futures entered a bear market this month as stockpiles in the U.S. beat estimates and farmers were set to harvest a second straight record crop. About 75 percent of U.S. corn was rated in good or excellent condition, the U.S. Department of Agriculture said yesterday. Output is set to total 13.935 billion bushels, it said June 11. Corn’s relative strength index fell to 23.7 yesterday, below the level of 30 that signals to some analysts that prices are poised to gain.
“Technical indicators are oversold,” Avtar Sandu, senior commodities manager at Phillip Futures Pte in Singapore, said in an e-mail, adding that the rebound may be short-lived. “There are showers in the Corn Belt and the weather is cool. This would help corn achieve a record harvest, thereby increasing both U.S. and global inventories which are already on the high side.”
Domestic stockpiles reached 3.85 billion bushels at the start of June, the USDA said June 30. That topped the average estimate of 3.72 billion in a Bloomberg survey of 26 analysts. While there has been some localized flooding rains and severe weather, a forecast of predominantly normal to cool temperatures this summer means an improved and possibly record yield is still likely, WeatherBELL Analytics LLC said yesterday.
Wheat for September delivery advanced 0.4 percent to $5.59 a bushel, rallying from as low as $5.56 yesterday, the lowest since Feb. 3. Soybeans for delivery in November declined 0.1 percent to $11.24 a bushel, retreating for a seventh day after closing yesterday at the lowest since December 2011.
Source: businessweek
