Corn rose to a record in Chicago on speculation the U.S. Department of Agriculture will cut its harvest estimates as the worst U.S. drought since 1956 scorches crops, driving global food costs higher.
U.S. corn output may slide to 10.929 billion bushels, 16 percent smaller than the government estimated in July, according to a Bloomberg News survey before the USDA releases predictions later today. Corn has surged 64 percent since mid-June, leading gains in soybeans and wheat, as drought conditions cover more than 60 percent of the lower 48 states. The past month’s jump in crop prices spurred the biggest increase in world food costs since November 2009, the United Nations said yesterday.
“Uncertainty remains around the level of U.S. corn yields and more specifically the level of abandonment,” Chris Gadd, a London-based analyst at Macquarie Group Ltd., said today by e-mail. “We remain very concerned for the outlook for soybeans, as production remains in trouble and demand remains resilient.”
Corn for December delivery rose 0.8 percent to $8.3025 a bushel on the Chicago Board of Trade by 12:57 p.m. London time. The grain touched $8.3075, surpassing an all-time peak set yesterday.
Soybeans for November rose 0.3 percent to $16.355 a bushel. The oilseed has rallied 24 percent since mid-June and reached a record $16.915 on July 23.
The USDA may cut its estimate for soybean production to 2.796 billion bushels, 8.3 percent below its July forecast, according to the Bloomberg survey. U.S. corn and soybean crops are in the worst condition since 1988, according to the USDA.
“There’s broad consensus that we’ll see yield cuts to corn and soybeans,” said Michael Creed, an agribusiness economist at National Australia Bank Ltd. “It’s a matter of the degree.”
December-delivery wheat gained 0.6 percent to $9.3275 a bushel. Prices have rallied 49 percent since June 15 as U.S. drought was compounded by dry weather in Russia. In Paris, November-delivery milling wheat gained 0.6 percent to 267 euros ($327) a metric ton on NYSE Liffe.
Russia’s wheat crop will be 45 million to 46 million tons in 2012-13, Arkady Zlochevsky, president of the country’s Grain Union, said yesterday. Two years ago, when the country’s worst drought in decades spurred a ban on exports, wheat production was 41.5 million tons.