US corn stocks dent grain prices on surprise leap

 

 

Grain prices recorded another day of high volatility after the US revealed that its corn stocks had risen over the last year - rather than recording the solid fall that traders had expected.

 

America's corn inventories at the start of September came in at 1.71 billion bushels, the USDA said, a figure which sent grain prices sharply lower in early deals in Chicago, with corn shedding more than 5%.

 

The revised figure, while only 35 million bushels higher than a year before, was significantly higher than earlier USDA estimates, as well as analysts' forecasts, none of which, in a poll of trading houses, fell within 200 million bushels of the actual result.

 

"The stocks report on corn was bearish," said US Commodities, which itself had pitched the figure at 1.40 billion bushels. The extra supply was equivalent to adding 4 bushels per acre to yield forecasts for this year's crop, whose disappointing result has been a major prop to prices.

 

A hope for prices avoiding a steep fall was the prospect that the stocks figure, which is supposed to show how much grain was left over from previous crops had been boosted to an artificially high level by the inclusion of some of this year's production.

 

Furthermore, separate data showed the US corn export sales over the last week reaching 954,000 tonnes, ahead of market forecasts.

 

The USDA trimmed to its hopes for US wheat crop this year, pegging it at 2.22 billion bushels, 42 million bushels lower than its previous estimate.

 

The downgrade reflected lower hopes for yields, notably in winter wheat, although, at 46.7 bushels per acre, the total crop was still on course to set a yield record.

 

The data was deemed by Benson Quinn Commodities as "somewhat supportive" to wheat prices, which indeed recovered on both sides of the Atlantic. Chicago wheat for December delivery, which tumbled 4.5% in early deals, ended 1.4% lower at US$6.74 a bushel.

 

The revival was enabled, however, by a recovery in corn too, which finished down 1.8% at US$4.95 ¾ a bushel.