Corn rose from a one-week low on speculation that demand from U.S. makers of biofuel and animal feed will erode inventories. Soybeans fell.
Ethanol production rose 1 percent in the week ended Jan. 18 and stockpiles dropped 1.4 percent, the Energy Department said today in a report. In the week ended Jan. 19, domestic chicken producers increased the number of chicks placed on feed by 1.1 percent from a year earlier, the U.S. Department of Agriculture said yesterday. The government said corn reserves on Aug. 31 will fall 39 percent to the lowest in 17 years.
“Ethanol production rose and stocks fell last week, and that helped to give corn a boost,” Dan Cekander, the director of grain-market analysis at Newedge USA LLC in Chicago, said in a telephone interview. “Rising animal numbers support speculation that we have not slowed feed demand. We have yet to ration what is already projected as a tight U.S. corn supply.”
Corn futures for March delivery rose 0.5 percent to close at $7.2425 a bushel at 2 p.m. on the Chicago Board of Trade. Earlier, prices slipped to $7.145, the lowest since Jan. 14, on speculation that rain may boost South America production, reducing overseas demand for U.S. supplies.
Soybeans fell for a second straight day on speculation that rain forecast during the next two weeks will increase yield potential for crops in Brazil and Argentina, the biggest exporters after the U.S.
As much as 2 inches (5.1 centimeters) of rain will boost crops over the next two days in parts of Argentina that have not received moisture for 17 days, with three more storms expected during the next two weeks, QT Weather in Chicago said in a report. Brazil will remain favorably wet, the forecaster said. Combined soybean production by the two countries will rise 28 percent to a record, the USDA said Jan. 11.
Soybean futures for March delivery fell 0.1 percent to $14.3525 a bushel in Chicago, after touching $14.15, the lowest since Jan. 16.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show.