Corn Drops Most Since August Before USDA Report: Wheat Falls

Mar 31, 2014 11:36 am ET

March 31 (Bloomberg) -- Corn headed for the biggest decline in seven months in Chicago on speculation that a government report today will show a surge in U.S. inventories.

Corn stockpiles as of March 1 probably rose 31 percent from a year earlier to 7.098 billion bushels (180.3 million metric tons), the highest for the date in four years, according the average estimate of analysts surveyed by Bloomberg. Futures jumped 17 percent this year through March 28 as a rise in exports boosted investor demand, raising concern that price gains may have been excessive given the supply outlook, said Terry Reilly, a senior commodity analyst for Futures International LLC.

“People are worried about inflated fund long-positions,” should the government report a jump in stockpiles, Reilly said in a telephone interview from Chicago.

Corn futures for May delivery lost 3 percent to $4.7725 a bushel at 10:33 a.m. on the Chicago Board of Trade. A close at that price would mark the biggest decline for a most-active contract since Aug. 22.

The U.S. Department of Agriculture will publish its quarterly inventory and prospective planting reports today at noon in Washington.

Hedge funds were net buyers of futures and options for a twelfth consecutive week as of March 25, holding the largest bet on rising prices since December 2012, data from the Commodity Futures Trading Commission show.

Wheat futures for May delivery fell 0.5 percent to $6.92 a bushel in Chicago, heading for a second straight decline, as rain may aid parched crops in the U.S., the top exporter.

Futures have risen 15 percent this month, poised for the biggest monthly gain since July 2012, on concern that dry weather in the U.S., Australia and eastern Europe will hurt yields.

Soybean futures for delivery in May slid 0.2 percent to $14.335 a bushel in Chicago. U.S. stockpiles on March 1 probably fell to the lowest level in 10 years for the date, based on the Bloomberg survey.

--With assistance from Ranjeetha Pakiam in Kuala Lumpur and Rudy Ruitenberg in Paris.