Corn rose in Chicago before a U.S. government report that analysts expect will show a cut in the forecast for the U.S. crop after drought across the Midwest hurt yields in the world’s biggest grower. Wheat also gained.
December-delivery corn gained as much as 1.3 percent to $7.265 a bushel on the Chicago Board of Trade and was at $7.225 by 12:06 p.m. in London. The most-active contract gained to $7.33 a bushel on July 9, the highest level since September, as hot, dry weather hits U.S. fields.
The U.S. Department of Agriculture will probably cut its estimate for this year’s U.S. corn output to 13.534 billion bushels, from its June outlook for a record 14.79 billion, according to the average of analysts’ estimates in a Bloomberg survey. Last year’s crop totaled 12.358 billion bushels. The report is due for release at 8:30 a.m. in Washington.
“We think the supply situation is severe,” Credit Suisse Group AG said in a report e-mailed today. “Price risks remain to the upside.”
A dimming production outlook in the U.S. may prompt the USDA to cut its forecast for global inventories to 143.8 million metric tons at the end of 2012-2013, from 155.7 million tons last month, according to a separate Bloomberg survey.
China may seek alternative suppliers after the recent surge in U.S. corn prices, China National Grain & Oils Information Center said in a report. The country may import 6 million tons in the next marketing year, it said.
Wheat for September delivery added 0.6 percent in Chicago to $8.2525 a bushel. Milling wheat for November delivery traded on NYSE Liffe in Paris slipped 0.5 percent to 247.25 euros ($303.92) a ton.
“The other region where grain production is expected to decline significantly is the Black Sea region,” Paul Deane, an analyst at Australia and New Zealand Banking Group Ltd., in a report. “Early harvest reports have confirmed the extent of damage to winter wheat in southern Russia and Ukraine.”
Soybeans for November delivery were little changed at $15.3875 a bushel, after the most active contract rose on July 9 to $15.7125, the highest level since the global food crisis in 2008.