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Corn prices rise on USDA data

12/11/2013 @ 10:35am

Corn futures gained for the third time in four sessions as investors who had bet prices would fall bought back their contracts after the U.S. Department of Agriculture lowered its forecast for domestic stockpiles in a report on Tuesday.

Corn inventories will total 1.792 billion bushels at the end of the marketing year on Aug. 31, the USDA estimated in its monthly supply and demand report. That's below the 1.887 billion bushels forecast by the government in November. The stockpiles estimate declined as the government raised its outlook for exports and ethanol use.

Speculative investors who were net-short 118,814 contracts as of Dec. 3, according to the Commodity Futures Trading Commission, may be buying to close out their positions, analysts said.

"The USDA did give us some usage-side hopes with yesteday's report," said Dave Marshall, a farm marketing adviser for advisory service TCFG LLC in Nashville, Illinois. "I don't think people expected to raise ethanol crush forecast as they did, even though the trend justified bumped-up usage rates. The specs have had such a massive short position in corn that it's going to take a while for them to close those positions."

Corn futures for December delivery gained three cents, or 0.7%, to $4.30 1/2 a bushel on the Chicago Board of Trade.

Soybeans also rose after the USDA lowered its forecast for inventories by 12% to 150 million bushels. Domestic processing of the oilseeds and exports to overseas buyers are expected to top last month's expectations, reducing the amount of soybeans that will be in storage on Aug. 31, according to the government.

Soybean futures for January delivery gained 3 1/2 cents, or 0.2%, to $13.41 1/2 a bushel on the CBOT.

Wheat futures for December delivery fell 2 1/2 cents, or 0.4%, to $6.27 1/4 a bushel in Chicago. The government in Tuesday's report unexpectedly raised its projection for domestic stockpiles by 1.8% to 575 million bushels. Increased exports from Canada will boost inventories in the marketing year that ends on June 1, according to the USDA.

Write to Tony Dreibus at tony.dreibus@wsj.com

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(END) Dow Jones Newswires

December 11, 2013 11:14 ET (16:14 GMT)

DJ Corn Rises After USDA Lowers Stockpiles Estimate; Soybeans Gain->copyright

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