Sept. 6 (Bloomberg) -- Corn futures posted the biggest gain in almost two weeks on signs that this year’s price slump is helping to boost demand from U.S. meat and ethanol producers. Soybeans rose for the fifth straight week, and wheat climbed.
Corn, the main ingredient in livestock feed and ethanol, a gasoline additive, has tumbled 33 percent this year as farmers begin harvesting a record crop. Profit margins on converting the grain into the products are the highest since December 2011, a U.S. Department of Agriculture gauge shows. Hog futures had the longest rally in 15 months on increasing demand for pork.
“There is a little buying by hog and ethanol producers to extend coverage,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “A lot of end-users have delayed purchases as prices have been falling, and they are jumping back into the market.”
On the Chicago Board of Trade, corn futures for December delivery rose 1.6 percent to close at $4.6825 a bushel at 1:15 p.m., the biggest gain for a most-active contract since Aug. 25. On Aug. 13, the grain touched a 35-month low of $4.4575 after the USDA forecast the largest crop ever this year.
Soybeans rose on speculation that the U.S. government will cut its production estimate after hot, dry Midwest weather eroded crop prospects, Joe Vaclavik, the president of Standard Grain Inc. in Chicago, said in a telephone interview.
The harvest may be 3.13 billion bushels, 3.7 percent below the USDA’s August estimate, a Bloomberg survey of analysts showed. The agency will update its forecast on Sept. 12.
Soybean futures for November delivery gained less than 0.1 percent to $13.6775 a bushel. The price rose 0.8 percent this week after surging 13 percent last month.
Wheat futures for December delivery gained 1.2 percent to $6.4775 a bushel. The price dropped in the previous seven sessions, the longest slump since July 1.
The USDA said that export sales rose 21 percent to 668,400 metric tons in the week ended Aug. 29 from a week earlier.
To contact the reporter on this story: Jeff Wilson in Chicago at Jwilson29@bloomberg.net
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