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Chicago grains hike as U.S. cuts yield estimate

12 August 2011 02:23 (UTC +04:00)

Baku-APA. Chicago grain market hiked in all products on Thursday, after the U.S. government lowered its estimates for crop productions due to hot and dry weather, which could hurt the crop growth, in the Midwest. Both corn and wheat settled above seven dollars per ounce, APA reports quoting Xinhua.

The most active corn contract for December delivery closed at 7. 14 U.S. dollars per bushel, up 25.5 U.S cents, or 3.7 percent. September wheat gained 16.25 cents, or 2.37 percent, to 7.0125 dollars per bushel. November soybean hiked 30.25 cents, or 2.3 percent, to 13.3175 dollars per bushel.

U.S. Department of Agriculture (USDA) on Thursday updated its forecasts for grain demand and supply for both U.S. and the world. It lowered the estimate for U.S. corn yield by 4.1 percent from July and reduced both soybean and spring wheat forecast by 5.2 percent.

Meanwhile, USDA predicted that the corn’s ending stock for 2011/2012 would arrive at 714 million bushels, resulting a stock/ usage ratio of 5.4 percent, the second lowest on record. Meanwhile, the world’s ending stocks of corn were also adjusted lower to 114. 53 million metric tons from 115.66 million last month, which was already a 5-year low.

Besides, the U.S. soybean production is estimated at 3.056 billion bushels, which was 168 million below earlier expectations. World’s ending stocks for the 2011/12 season were pegged at just 60.95 million metric tons, down from 61.97 million last month.

Although the USDA reports were considered neutral for wheat, the market found support from the bullish sentiment in the other grains. Speculative buying and short-covering was active in the day.