Corn prices rise as global stockpiles shrink
Corn prices rise 3.6 percent as government says global stockpiles shrink and demand increases
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| Symbol | Price | Change |
|---|---|---|
| MHP | 37.20 | +0.07 |
, On Wednesday February 9, 2011, 5:45 pm
Corn prices rose Wednesday after a new government report predicted stockpiles will hit a 15-year low by late August.
The U.S. Agriculture Department's latest forecast said corn supplies are expected to total 675 million bushels as of late August when this year's harvest begins. That would be the lowest surplus level since 1996.
The government said supplies have dwindled over the past month because of improving demand, largely from ethanol producers.
Global corn supplies also are expected to be lower, in part because of weather issues that affected Argentina's crop and improving demand, the agency said.
The report measures global supply and demand for grains, oilseeds and other crops. The department said its projections for wheat and soybean reserves remained unchanged at historically low levels.
"It's an unbelievable development as far as (corn) supply reductions," said Jason Ward, analyst with Northstar Commodity. "More than ever, we need the 2011 crop to be huge."
Corn for March delivery rose 24.25 cents, or 3.6 percent, to settle at $6.98 a bushel.
Corn has doubled in the last six months, from $3.50 a bushel to nearly $7 a bushel, and will likely continue to increase in the months ahead because of tight supplies and stronger demand, Ward said.
In other contracts for March, wheat rose 11.75 cents to settle at $8.86 a bushel and soybeans rose 16.75 cents to settle at $14.51 a bushel.
In energy trading, oil prices fell after the government reported crude oil supplies rose last week.
In addition, a report from Platts, the energy information arm of McGraw-Hill Cos., said OPEC crude oil production last month averaged 29.57 million barrels per day. That's the highest level in two years.
Benchmark crude for March delivery fell 23 cents to settle at $86.71 on the New York Mercantile Exchange.
In other Nymex trading for March contracts, heating oil rose 3.71 cents to settle at $2.7689 per gallon, gasoline futures rose 3.18 cents to $2.526 per gallon and natural gas rose 0.4 cent to $4.044 per 1,000 cubic feet.
Metals were mixed.
In contracts for March delivery, silver rose 0.5 cent to settle at $30.276 an ounce, copper fell 5 cents to $4.524 a pound and palladium fell $12 to $826.45 an ounce.
April gold added $1.40 to settle at $1,365.50 an ounce and April platinum fell $2.50 to $1,859.40 an ounce.
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