US corn futures drop after reports of higher stocks
The price of the grain in the US has fallen 11% from a week ago, weakened by a US Department of Agriculture report showing domestic stocks were more plentiful than analysts had expected.
This eased concerns that shortfalls this year would create supply problems in 2011. US exports make up about 60% of the world’s corn trade.
The report, issued last week Thursday, “completely changed the situation”, said a commodity broker.
Chicago Board of Trade (CBOT) December corn fell to as low as $4.54¼ a bushel Monday, down 2.5%, before stabilising at $4.68.
Analysts believe the USDA’s updated agricultural supply and demand outlook due Friday will reduce forecasts for average US corn yields from the current 162.5 bushels per acre.
But the grain stocks report would cushion the market from all but a surprising drop in yield, the broker said.
Other mainstream agricultural commodities have followed corn lower, but to a lesser extent.
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