US corn, soy extend loss on high output forecast

 

 

US corn and soy extended losses after FCStone Group Inc. forecast output of the two US crops will top government forecasts as cool, wet weather in August increased yields.

 

Production of corn, the nation's largest crop, will total 13.02 billion bushels, said David Smoldt, a vice president at West Des Moines, Iowa-based FCStone. That compared with the company's August forecast for 12.814 billion bushels for 2009. Last month, the US Department of Agriculture (USDA) predicted 12.761 billion bushels. Chicago futures fell as much as 0.6 percent.

 

Corn for December delivery dropped to as low as US$3.1725 a bushel in electronic trading on the Chicago Board of Trade and was at US$3.1875. The price touched US$3.165 on Tuesday (Sep 1), the lowest intraday level since August 17.

 

US farmers harvested 12.101 billion bushels last year and a record 13.1 billion bushels in 2007, government data show.

 

Soy for November delivery declined as much as 0.7 percent to US$9.485 a bushel, the lowest intraday level since August 19, and last traded at US$9.557.

 

The soy harvest will reach a record 3.266 billion bushels, or 2.1-percent more than the 3.199 billion forecast by the USDA, and up from the 3.247 billion forecast by FCStone in August, Smoldt said. Last year's crop was 2.959 billion bushels, down from a record 3.197 billion in 2006, according to USDA data.

 

China, the world's largest soy importer, may purchase 2.6 million tonnes of the oilseed this month, falling below 3 million tonnes for the second month, the China National Grain & Oils Information Center said.

 

Corn lost 3.2 percent on Tuesday, the steepest decline since August 7, and the oilseed fell 2.5 percent as crude oil dropped to a two-week low after the dollar strengthened and slumping equity markets renewed concern that the economic recovery may falter.

 

''Corn prices were the downside leader of the grains and oilseed complex thanks to benign Midwest weather, the advancing US dollar and substantial macro market deterioration,'' said Peter McGuire, managing director at CWA Global Markets Pty in Sydney.

 

Wheat for December delivery in Chicago dropped 0.1 percent to US$4.8675 a bushel after losing 2.3 percent on Tuesday, the biggest drop since August 6. The price touched US$4.8075 on August 31, the lowest level since December 8.