Societe Generale SA raised its price forecasts for U.S. corn and wheat as dry weather may damage crops.
Corn may average $7 a bushel in the third quarter, up from an estimate of $6.20 a bushel, Christopher Narayanan, the bank’s head of agricultural commodity research, said today in a report. The grain may average $6.46 in the fourth quarter, compared with an estimate of $5.72. Corn for December delivery was at $6.335 a bushel by 11:30 a.m. today on the Chicago Board of Trade.
U.S. corn yields may drop to 155.4 bushels an acre, lower than the Department of Agriculture’s estimate for a record 166 bushels per acre, because crop conditions have “progressively worsened” in the second half of June, Narayanan said.
“Given the recent and forecasted weather conditions, we continue to see downside risk to yields for both corn and soybeans,” Narayanan wrote. “Additionally, if conditions do not improve, we would expect to see a higher than normal abandonment rate, which would net less harvested acreage, adding another downside risk to production.”
Wheat prices may average $7.87 a bushel in the third quarter, up from an earlier forecast of $7.25, and $7.84 in the fourth quarter, an increase from $7.50. September-delivery wheat traded at $7.5225 today in Chicago. Both wheat and corn are used in livestock feed.