Corn slips on higher USDA expectations
U.S. corn futures are lower Monday morning, as traders brace for the U.S. Department of Agriculture to issue a crop report that could cause price volatility.
Chicago Board of Trade futures for September delivery are down 4 1/4 cents or 0.9% at $4.61 1/2 a bushel, trading at fresh two-and-a-half-year lows for the front-month contract.
The USDA at noon EDT Monday will release its monthly supply-and-demand estimates, including updated forecasts for the size of this year's U.S. corn harvest. The amount of production this fall will largely determine how much supplies can recover from the current tight levels caused by last year's severe drought.
Trading is likely to be light and choppy before the report.
Analysts are optimistic about corn yields since cool temperatures across the Midwest in much of July kept stress on crops low. Much of the corn crop during that period went through its crucial pollination phase, which determines the number of kernels on each ear of corn.
Analysts expect the USDA to forecast record corn production of 14.005 billion bushels this year, up 0.4% from its forecast last month of 13.95 billion bushels, according to the average forecast in a Dow Jones Newswires poll of analysts. Production last year was 10.78 billion bushels.
Analysts expect the government to forecast a corn-crop yield of 157.7 bushels an acre, up 0.8% from the USDA's forecast last month of 156.5 bushels an acre.
Weather forecasts Monday were drier than before the weekend, though the most important period for corn crops to have favorable weather has already passed.
The National Weather Service forecasts one-tenth inch of rain or less in the next five days in most of the central and northern Corn Belt, including all of Iowa. Areas farther south and west, including southern Missouri, Kansas and Nebraska, will receive from one-quarter of an inch to one inch.
The NWS's six- to 10-day outlook predicts below-average chances of rain in most of the Corn Belt, but above-average chances of rain in Ohio. The eight- to 14-day outlook predicts below-average chances of rain in most of Iowa and some surrounding areas, but above-average chances of rain in North Dakota and in the eastern Corn Belt.
The NWS predicts temperatures between six and 14 days from now will be above-average in the northern Corn Belt, including Minnesota, and below-average in the southern Corn Belt.
In export-related news, the USDA Monday morning said private exporters reported selling 252,153 metric tons of corn to Mexico for delivery during the next marketing year, which starts Sept. 1.
Write to Owen Fletcher at email@example.com
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(END) Dow Jones Newswires
August 12, 2013 10:06 ET (14:06 GMT)
DJ U.S. Corn Falls; Analysts See USDA Raising Supply Forecast->copyright