November 1, 2011

 

CBOT corn drops amid larger global supplies

 

 

CBOT corn falls as larger crops from Ukraine and EU are building up competition for US grain in the export markets, according to a Bloomberg report.

 

December delivery corn fell as much as 1.9% to US$6.425 a bushel on the CBOT and was at US$6.49 on October 31 (Mon). The grain added 9.5% this month, recovering some of September's 23% plunge.

 

Ukraine had harvested 68% of its planted corn last week, reaping 14.1 million tonnes, more than all of last year's harvest, the Agriculture Ministry reported. The EU, normally a net importer of corn, is exporting the grain at the fastest pace in at least seven years.

 

Prices "could be under pressure due to lack of export demand" for US corn, Lynette Tan, an analyst said.

 

Corn yields in Ukraine jumped to 5.76 tonnes a hectare (2.47 acres) this year from 4.4 tonnes in 2010 the Agriculture Ministry said Oct. 28 (Fri). Ukraine may boost production to 21 million tonnes this marketing year, from 11.9 million tonnes a year earlier, according to the USDA

 

EU corn exports rose to 849,877 tonnes in the first 17 weeks of the 2011-12 marketing year, the bloc reported last week. That compared with about 272,000 tonnes a year earlier.

 

"European production should approach 64 million tonnes," Paris-based farm adviser Agritel said in a research note. "Fortunately export activity remains very elevated" it added.

 

Corn traded on NYSE Liffe in Paris for delivery in January, the contract with the greatest open interest, was unchanged at EUR189 (US$261.7) a tonne.

 

Soy for January delivery declined 0.8% to US$12.17 a bushel in Chicago, narrowing the monthly gain for the most active contract to 3.2%.

 

Argentine truck owners who ship soy and corn are blocking access to the country's grain ports, said Edgardo Aniceto, a spokesman for the Federation of Argentine Transporters. The South American nation is the second largest exporter of corn and soy, according to the USDA.

 

The blockade "will become a supportive factor for prices, if it is prolonged," Hiroyuki Kikukawa, general manager for research at Ido Securities Co. Ltd. in Tokyo, said.

 

Wheat for December delivery fell 0.9% to US$6.39 a bushel on the CBOT, narrowing the advance this month to 4.8%. Milling wheat for January delivery traded in Paris was unchanged at EUR183 (US$ 253.4) a tonne.