May 22 (Bloomberg) -- Corn futures jumped the most in a week as demand rose for exports from the U.S., the world’s biggest shipper, and inventory of grain-based ethanol dropped to the lowest since November 2010. Wheat and soybeans gained.
The U.S. Department of Agriculture reported sales of a combined 540,000 metric tons of corn to China and unknown destinations for delivery in the 12 months that start Sept. 1. Ethanol output rose to the highest in 11 months, and stockpiles dropped for the fourth straight week, government data showed.
Supplies of ethanol, a gasoline additive, “are now as low as they usually are coming out of the end of the driving season in late August,” Jerry Gidel, the chief grain-market analyst at Rice Dairy LLC in Chicago, said in a telephone interview. “There is little reason to expect production to slow as U.S. driving demand will increase demand the next several months.”
Corn futures for July delivery rose 2.9 percent to settle at $6.585 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain for a most-active contract since May 13.
U.S. supplies of the grain left from last year are forecast to fall to the lowest since 1996 before the 2013 harvest, the government said on May 10.
Wheat futures for July delivery advanced 1.2 percent to $6.885 a bushel, the biggest gain since May 9, partly on signs of increasing use in livestock feedstock.
“Wheat is a cheaper feed alternative to corn on a per-pound and protein basis,” Dave Marshall, a farm-marketing adviser at Toay Commodity Futures Group LLC in Nashville, Illinois, said in a telephone interview. “Wheat supplies are not positioned where mills and exporters need them, and because of the shortage of corn, there is increased feed demand.”
Soybean futures for July delivery climbed 1.1 percent to $14.9425 a bushel. The price rose for the fifth straight session, the longest rally in more than a year.
Wet weather in the next two weeks will delay sowing in the Midwest, Gidel said. Planting was 24 percent completed on May 19, down from 42 percent on average in the previous five years, the USDA said on May 20.
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