February 9, 2012

As speculations run high that the USDA may lower its estimates for global stockpiles, US corn futures rose Wednesday (Feb 8).

Corn futures for March delivery increased by 0.7% and were trading at US$6.4675 per bushel at 11:09 a.m. London time at Chicago Board of Trade.

According to estimates of Bloomberg, the USDA may cut down its estimates of corn inventory this year by 2.9% from its earlier forecast of 124.44 million tonnes.

The main reason for this decline is the drought in South America which is expected to hit corn production adversely. Argentina's corn out for 2012 may be 22.5 million tonnes annually while that of Brazil may be only 59.61 million tonnes. The USDA had earlier estimated 26 million tonnes and 61 million tonnes of production for Argentina and Brazil respectively.