Crop prices rose in Chicago, driving corn toward the longest rally since February, as U.S. government estimates showed shrinking stockpiles after the worst drought since the 1930s seared fields across the Midwest.
Corn inventories on Dec. 1 were 8.03 billion bushels, 17 percent less than the year-earlier 9.647 billion, the U.S. Department of Agriculture said in a report on Jan. 11. Analysts surveyed by Bloomberg expected 8.219 billion. Wheat reserves on May 31, before the 2013 harvest, will be 716 million bushels, down 5 percent from a December estimate and less than the 741 million expected by analysts.
“A sharp increase in demand and tightening grain stockpiles mean the January USDA reports were supportive for corn prices,” Luke Mathews, a strategist at Commonwealth Bank of Australia, wrote in a report today.
Corn for delivery in March climbed 2.1 percent to $7.235 a bushel at 7:12 a.m. on the Chicago Board of Trade. The grain reached $7.24, the highest level since Dec. 18, and advanced for a sixth session, poised for the longest streak for a most-active contract since Feb. 29.
Lower quarterly corn stockpiles mean supply before the 2013 harvest in the U.S., the world’s largest grower and exporter, will further shrink to 602 million bushels, the lowest since 1996, USDA data released Jan. 11 showed. Analysts on average expected 647 million bushels, according to a Bloomberg survey.
Wheat for delivery in March rose 2.3 percent to $7.7175 a bushel. The grain touched $7.75, the highest price since Jan. 2. In Paris, milling wheat for the same delivery month added 1.5 percent to 248.50 euros ($331.45) a metric ton on NYSE Liffe.
Soybeans for delivery in March climbed 1.5 percent to $13.9425 a bushel in Chicago. The oilseed reached $13.96, the highest price since Jan. 4.
U.S. soybean inventories on Dec. 1 totaled 1.966 billion bushels, less than analysts expected and the lowest level for the date since 2003, the USDA said. Still, the agency boosted its forecasts for U.S. and Brazilian production, helping send prices to a six-month low of $13.515 on Jan. 11.