Corn Futures Surge Most Since June as U.S. Supplies Ebb; Soybeans Decline

Corn futures surged the most in nine months after inventories slumped to a four-year low in the U.S., the world’s biggest exporter. Soybeans fell on rising production in South America.

Corn stockpiles on March 1 declined 15 percent from a year earlier as demand for animal feed, fuel and food climbed, the U.S. Department of Agriculture said yesterday. In the week ended March 24, U.S. exports for delivery before Aug. 31 doubled to 1.91 million metric tons from a week earlier. Futures jumped the most allowed by the Chicago Board of Trade for the second straight day.

“Declining U.S. grain supply was a surprise, and the market is adjusting to a tightening situation,” said Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin. “Export demand improved.”

Corn futures for May delivery gained 42.75 cents, or 6.2 percent, to $7.36 a bushel at 1:15 p.m., the biggest gain since June 30. Earlier, the price rose by the exchange maximum of 45 cents. Yesterday, the limit was 30 cents.

The commodity, up 6.7 percent this week, has more than doubled in the past year on lower global output and rising demand for grain-based ethanol.

Soybean futures for May delivery fell 16.5 cents, or 1.2 percent, to $13.9375 a bushel, snapping a three-day rally. The most-active contract gained 2.6 percent this week and has climbed 48 percent in the past year on record Chinese demand for U.S. supplies.

Prices also fell on speculation that declining margins to produce animal feed and cooking oil from soybeans may reduce imports by China, the biggest consumer, Henderson said.

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show.

(Source: http://www.bloomberg.com/news/2011-04-01/corn-futures-surge-most-since-june-as-u-s-supplies-ebb-soybeans-decline.html)