The US estimate on heavy rain has been cut by 3.2% from a forecast in May, causing corn to hit a record as it rose for a sixth day, leading gains in soybeans, wheat and rice, reports Bloomberg.com. Output is estimated at 11.735 billion bushels, compared with 12.125 billion forecast on May 9, reports the U.S. Department of Agriculture (USDA), an estimate 10% smaller than last year. US inventories could drop to the lowest since 1996 by Aug. 31, 2009, said USDA, while the US government predicts global inventories to fall to a 24- year low.
Corn prices have climbed 50% this year, heading for a fourth straight annual gain, as demand surged for livestock feed and biofuels. Wheat, rice, and soybean prices also reached records this year after adverse weather curbed global output, reducing stockpiles amid rising demand. ``No one can stop the corn price's run-up now,'' Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said from Tokyo. "Now we have heavy rains in the Midwest and will see a summer heat wave in July and August. We may see the USDA cut further its output estimate next month."
Corn for July delivery rose as much as 13.25 cents, or 2%, to $6.865 a bushel in after-hours trading on the Chicago Board of Trade and was at $6.835 in London. The new crop December contract reached above $7 for the first time.
Estimated US inventories of 673 million bushels before the 2009 harvest, down 53% from a year earlier, would represent 5.4% of expected annual consumption, or 20 days of use. That's down from 40 days estimated this year and the lowest since 1996 when reserves were projected to last 18 days.
The government cut its yield forecast for corn by 3.2% to 148.9 bushels an acre, from 153.9 predicted last month and 151.1 for last year's crop. USDA said the crop, which will be harvested by November, was reduced due to "persistent heavy rainfall across the Corn Belt."
About 60% of the corn crop in the US, the largest exporter of the grain, was in good or excellent condition as of June 8, reports USDA. As of that date, an estimated 89% of the corn crop had emerged from the ground, compared with 98% a year ago and the five-year average of 89%, USDA said.