Corn futures decline on improved supply forecast  Commodity prices have surged over the past year as global demand eclipsed stockpiles. However, over the past few weeks analysts have grown more bearish on certain commodities as improving inventories have caused prices to decline. Corn prices have tumbled in trading this week after the U.S. Agricultural Department said supplies would grow by September.

According to the USDA, for the 2010-2011 marketing year ending August 31, corn ending stocks will hit 730 million bushels. That figure represents an eight percent increase from the group's April 8 estimate of 675 million bushels. Further, it surprised analysts who had projected the government to cut its outlook to 665 million bushels, Market Watch reports.

Moreover, the USDA forecast that during this year's corn-planting season, which runs from mid-April until the end of May, there will be 92.2 million acres planted - up from 88.2 million acres in the year prior. The government also expects higher corn yields per harvested acre, with production at a record 13.5 billion bushels. Analysts, however, said the government could still change its estimates.

"A lot can change from now until harvest," American Farm Bureau Federation crops economist Todd Davis said in an interview. "We still don't know the impact late planting in Corn Belt states east of the Mississippi will have on this year's corn crop. We're going to need a warm summer with timely rains to realize this 13.5 billion bushel corn crop."

Grain prices have soared over the previous 12 months as farmers around the globe had to combat inclement weather that damaged crops. What's more, surging demand for corn - especially from emerging economies - has grown at a torrid clip, while farmers have struggled to keep up with the soaring demand.

On the Chicago Mercantile Exchange on Thursday morning, corn futures for July delivery sunk 1.5 percent, or 10.25 cents, to trade at $6.67 per bushel. Over the past year, corn futures have jumped 80 percent in value on record use by ethanol producers and increasing demand from livestock farmers, Bloomberg reports.

Corn is the biggest U.S. crop. In 2010, it was valued at $66.7 billion.
Share To:

Strategic Sourceror

Post A Comment:

0 comments so far,add yours