Corn fell in Chicago, extending a monthly decline, as Morgan Stanley forecast pressure on prices next year from higher South American exports of the grain.
U.S. corn shipments, the world’s largest, may slump 21 percent in the 2011-12 season to 1.45 billion bushels, the least since 1985-86, according to Morgan Stanley. That’s smaller than a Nov. 9 forecast of 1.6 billion bushels by the U.S. Department of Agriculture.
“Corn prices will likely come under pressure in the second half of the year as rebounding production in South America, and ultimately the U.S., increases supply,” analysts led by Hussein Allidina wrote in the report e-mailed today, referring to 2012.
March-delivery corn dropped 1 percent to $5.995 a bushel on the Chicago Board of Trade by 12:58 p.m. Paris time. Prices are down 7.3 percent this month.
Lower prices may encourage China, the world’s second- largest corn user, to boost imports to about 5 million to 7 million metric tons in 2011-12, Paul Deane, an agricultural economist at Australia & New Zealand Banking Group Ltd., said by phone from Melbourne today. That’s more than the 3 million tons forecast by the USDA.
Wheat for March delivery declined 0.6 percent to $6.125 a bushel. The grain has dropped 2.5 percent this month. Milling wheat for delivery in the same month traded on NYSE Liffe in Paris fell 1 percent to 176.75 euros ($235.53) a ton.
“Cheaper alternatives from the Black Sea, the EU and Argentina are likely to continue to edge out U.S. exports,” Morgan Stanley said.
Soybeans for delivery in January slipped 0.1 percent to $11.2425 a bushel in Chicago. The oilseed is down 7.6 percent this month.
“Weak global crushing demand and adequate Brazilian supplies have decimated demand for U.S. 11/12 exports,” the Morgan Stanley analysts wrote.