Corn dropped for the first time in five days as the U.S. harvest advanced and some investors sold the grain after a 19 percent rally driven by a lower crop estimate from the Department of Agriculture.
The December-delivery contract lost as much as 0.5 percent to $5.7625 a bushel on the Chicago Board of Trade, and traded at that price at 1:03 p.m. in Singapore. The contract had surged from $4.885 a bushel on Oct. 6 to yesterday’s close of $5.79.
About 51 percent of the corn crop was harvested as of Oct. 10, up from 37 percent a week earlier and the previous five-year average of 30 percent, the USDA said yesterday. On Oct. 8, the USDA cut its corn-crop estimate for a second time in as many months, predicting a harvest of 321.7 million metric tons.
“We expect the harvesting progress to be smooth,” Chung Yang Ker, an analyst at Phillip Futures Pte. in Singapore, said by phone today. In addition, “we cannot rule out profit- taking” by some investors after the surge, Ker said.
December-delivery wheat was little changed at $7.095 a bushel in Chicago after swinging between gains and losses. Soybeans for November delivery declined as much as 0.6 percent to $11.72 a bushel, and traded at $11.76.
About 67 percent of the U.S. soybean crop had been collected as of Oct. 10, up from 37 percent a week earlier and the five-year average of 48 percent, the USDA said yesterday.
Ukraine’s government may start grain-export quotas in about 10 days to avoid higher prices, Deputy Prime Minister Viktor Slauta said yesterday. Ukraine was last year’s second-largest wheat exporter in the former Soviet Union and the largest corn shipper, according to data from the USDA.
Ukraine Exports
The country may ship 500,000 tons of wheat, 2 million tons of corn and 200,000 tons of barley by Dec. 31, the Kiev-based Economy Ministry said on Oct. 11 in a draft resolution on its website. The ministry wants to limit total grain shipments to 2.7 million tons through the end of the year to cool local prices and prevent a domestic shortage.
Rough rice for November delivery climbed as much as 0.6 percent to $13.46 per 100 pounds in Chicago, extending yesterday’s 2.9 percent advance. Rice touched $13.515 on Oct. 11, the highest price since March 3.
Futures may advance as high as $17 per 100 pounds by January on concern U.S. milled-rice production may be at least 10 percent smaller than the USDA estimated after dry weather cut yields, Dwight A. Roberts, president of the U.S. Rice Producers Association, said on Oct. 11. Roberts correctly predicted last year that the grain would peak at $16.
A weaker dollar may also support grain and soybean prices as it makes commodities priced in the U.S. currency cheaper for overseas buyers, Phillip’s Ker said.
The Dollar Index, which tracks the greenback against the currencies six major trading partners, fell for a second day after minutes of the Federal Reserve’s September meeting showed monetary policy may be eased further “before long.”
“With that quantitative easing, we might see the U.S. dollar weaken further,” Ker said. “This could boost the prices of commodities denominated in U.S. dollars.”
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
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