Corn and soybeans rose in Chicago on speculation the U.S. government will cut estimates for the nation’s harvest this year as hot weather curbs yields.
U.S. farmers may harvest 13.079 billion bushels of corn, below the Department of Agriculture’s July estimate of 13.47 billion bushels, according to the average estimate of 31 analysts in a Bloomberg News survey. Soybean output may be 3.184 billion bushels, under the USDA’s 3.225 billion-bushel forecast, the survey showed. The USDA will release the latest outlook at 8:30 a.m. in Washington today.
“In view of the poorer quality of the plants, downside revisions of expected crop yields are likely for corn and soybeans,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report today. “Coupled with continued robust demand, the expected corn ending stocks for 2011-2012 should also be lower than previously thought.”
Corn for December delivery rose 3.75 cents, or 0.5 percent, to $6.9225 a bushel by 11:17 a.m. London time on the Chicago Board of Trade. Soybeans for November delivery climbed 15.75 cents, or 1.2 percent, to $13.1725 a bushel.
Production of ethanol, made from corn in the U.S., rose last week to a nine-week high of 908,000 barrels a day, according to an Energy Department report. Production of the biofuel that’s mixed with gasoline was forecast by the USDA last month to use about 38 percent of the nation’s corn crop.
Corn yields in the U.S., which accounts for 39 percent of the global harvest and more than half of world exports, may average 155.4 bushels an acre, the Bloomberg survey showed, less than the government forecast for 158.7 bushels. Soybean yields may drop to 42.9 bushels an acre, below the 43.4 bushels forecast by the USDA.
“The grain fundamentals specifically are quite tight still, and that’s showing itself in the market,” said Christopher Gadd, an analyst at Macquarie Group Ltd. in London. “The belief out there is that there’s a problem in corn. We’ve seen corn prices supported because there’s talk of lower yields in the Midwest.”
Wheat for December delivery gained 4 cents, or 0.6 percent, to $7.2325 a bushel. Milling wheat for November delivery traded on NYSE Liffe in Paris rose 1 euro, or 0.5 percent, to 196 euros ($278) a metric ton.