Corn falls as U.S. raises supply forecast, wheat drops for 4th day
Chicago corn slid on Wednesday, falling for two out of three sessions, as the U.S. Department of Agriculture (USDA) raised its forecast for supplies on expectations of higher production amid lower demand.
Wheat fell for a fourth consecutive session on improved Northern Hemisphere weather, while soybeans edged lower.
“We are looking at a glut in corn supplies as it is not just U.S. which is likely to have a big crop; we are expecting higher output in Brazil as well,” said one Singapore-based corn trader.
“On the demand front, the (novel) coronavirus and African Swine Fever are reducing consumption.”
The most-active corn contract on the Chicago Board of Trade (CBOT) slid 0.4% to $3.21 a bushel by 0353 GMT. Wheat declined 0.7% to $5.11 a bushel and soybeans fell 0.1% to $8.51-1/2 a bushel.
The USDA projected U.S. corn ending stocks at 3.318 billion bushels for the 2020/21 marketing year, the largest since 1987/1988, as falling demand for corn-based ethanol and animal feed due to the COVID-19 pandemic couples with massive planting projections.
Oil prices fell on worries about a possible second wave of the new coronavirus cases in countries starting to ease lockdowns, while industry data showed a rise in U.S. crude inventories.
The USDA raised its forecast of 2019/20 soybean ending stocks to 580 million bushels, up from 480 million last month and above even the highest in a range of trade expectations.
But the government projected soybean stocks falling to 405 million bushels by the end of 2020/21, below the average estimate in a Reuters survey of 430 million.
The USDA, through its daily reporting system, confirmed private sales of 136,000 tonnes of U.S. soybeans to China.
The agency also raised its forecast of 2019/20 world wheat ending stocks to 295.12 million tonnes, from 292.78 million last month, and projected that 2020/21 world stocks would climb to 310.12 million tonnes, above a range of trade expectations.
Commodity funds were net buyers of CBOT corn and soymeal futures contracts on Tuesday and net sellers of wheat, soyoil and soybean futures, traders said. Source: Reuters (Reporting by Naveen Thukral; editing by Uttaresh.V)