October 5, 2010

US corn futures fall amid higher stocks speculations

The price of the grain in the US has fallen 11% from a week ago, weakened by a USDA report showing domestic stocks were more plentiful than analysts had expected.

This eased concerns that shortfalls this year would create supply problems in 2011. US exports make up about 60% of the world's corn trade.

CBOT December corn fell to as low as US$4.54¼ a bushel Monday (Oct 4), down 2.5%, before stabilising at US$4.68.

Analysts believe the USDA's updated agricultural supply and demand outlook due Friday will reduce forecasts for average US corn yields from the current 162.5 bushels per acre.

However, the grain stocks report would cushion the market from all but a surprising drop in yield, analysts said.

Meanwhile, other mainstream agricultural commodities have followed corn lower, but to a lesser extent.