April 13 (Bloomberg) -- Corn futures rose on speculation that yesterday’s 3 percent decline will spur purchases by livestock producers facing increased overseas demand for U.S. meat. Wheat fell as rain may aid U.S. crop.
U.S. beef exports jumped 25 percent in February from a year earlier and pork shipments increased 8 percent, the U.S. Meat Export Federation said today. Corn prices have more than doubled in the past year as rising demand erodes U.S. inventories that the government estimates will drop before the harvest to the lowest since 1996.
“The market supplies are tight, and yesterday’s drop provided livestock producers an opportunity to buy ahead,” said Shawn McCambridge, the senior grain analyst for Prudential Bache Commodities LLC in Chicago.
Corn futures for July delivery rose 3.5 cents, or 0.5 percent, to close at $7.61 bushel at 1:15 p.m. on the Chicago Board of Trade. The grain touched a 33-month high of $7.8875 on April 11, on increasing demand for feed and grain-based ethanol.
Prices also rose on forecasts for cool, wet weather during the next 10 days for most of the Midwest, the main U.S. growing region, which may slow planting and increase risks to yields from hot weather in July and August, McCambridge said.
On March 1, corn inventories dropped to 6.523 billion bushels as demand rose to a record in the December-through-February quarter, according to the U.S. Department of Agriculture. Supplies held by farmers fell 26 percent from a year earlier and represented 52 percent of total stockpiles, the smallest for the date since before 1960, USDA data show.
“We need to get ideal weather throughout the growing season and across the Midwest to increase corn supplies to a more comfortable level next year,” McCambridge said.
Wheat fell on forecasts for rain in the southern Great Plains. Parched fields from western Texas to Nebraska will get as much to 2 inches (5.1 centimeters) the next two weeks, benefitting crops beginning to develop grain, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas.
About 36 percent of the U.S. winter-wheat was in good or excellent condition as of April 10, compared with 65 percent a year earlier and the lowest rating since 2002, the USDA said this week.
“The forecasts are a little wetter and should provide some short-term benefits,” said Ben Buckner, a market analyst for AgResource Co. in Chicago. “There’s been some yield loss from the dry weather, but the rains should help to stabilize some crops.”
Wheat futures for July delivery fell 4.25 cents, or 0.5 percent, to $7.88 a bushel in Chicago, the third straight decline. Prices have risen 61 percent in the past year after adverse weather reduced production in Russia, Ukraine, Canada and Australia, boosting demand for U.S. supplies.
Corn, the main ingredient in livestock feed, is the biggest U.S. crop, valued at $66.7 billion in 2010. Wheat is the fourth-largest, with a value last year of $13 billion, behind soybeans and hay.
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