November 1, 2010
US corn futures gain the highest in more than two years
Corn futures advanced to the highest price in more than two years amid speculations that the USDA may lower its estimate of the nation's harvest for a third straight month.
Corn for December delivery gained as much as 1.5% to US$5.9075 a bushel, the highest price for the most-active contract on the CBOT since Augugust 29, 2008. It traded at US$5.8925, up 1.3% at 2:48 p.m. Singapore time.
Sixteen of 27 traders and analysts surveyed from Chicago to Tokyo on October 29 said corn will climb, and 15 respondents said soy will advance, on speculation that the USDA will trim its forecasts for harvests.
"There's uncertainty around the US harvest," Michael Pitts, commodity sales director at the National Australia Bank Ltd., said.
The USDA lowered on October 8 its estimate of the corn harvest to 12.664 billion bushels, from 13.16 billion bushels a month earlier, after flooding in June and hot, dry weather in August cut yields in the Midwest, the largest US growing region. Last year's harvest was a record 13.11 billion bushels. The USDA will release its latest estimate on November 9.
The Dollar Index fell for a third day on speculation that the Federal Reserve will take more credit-easing measures amid signs of a weakening recovery in the world's largest economy. A declining dollar makes supplies from the US cheaper for holders of other currencies.
Soy for January delivery added as much as 0.6% to US$12.435 a bushel in Chicago, before trading at US$12.425 a bushel in Chicago. Wheat for December delivery increased by as much as 1.4% to US$7.275 a bushel before trading at US$7.2725.
The level of the dollar "is the first thing obviously to look at" as the trigger for changes in prices of US supplies. That's what's going to push prices," Pitts said.
Rains are needed in some US wheat-growing areas to support crop development, Telvent DTN Inc. said in a report dated October 29.
"We're looking at the forecast in the US and what that means for the crop. Dry weather may cause a more adverse growing situation," Pitts said.
