Forexpros – Corn futures were up for a third day on Tuesday, trading close to a two-week high as prices continued to draw support from a pair of highly-anticipated reports from the U.S. Department of Agriculture last week.
On the Chicago Mercantile Exchange, corn futures for May delivery traded at USD6.5712 a bushel during European morning trade, rising 0.32%.
It earlier rose by as much as 0.45% to trade at a session high of USD6.5738 a bushel. On Monday, prices hit USD6.5937, the highest since March 20.
On Friday, the USDA released two closely-watched reports, one detailing how much grain is in domestic storage as of March 1 and the other projecting how many acres farmers will plant this spring of major crops such as corn, soybeans and wheat.
Corn prices soared 6.57% on Friday, the biggest one-day advance in 21 months after the USDA said that corn inventories on March 1 fell by a greater-than-expected 7.9% to 6.009 billion bushels from a year earlier, the lowest for this time of year since 2004.
The supplies raised fears corn supplies will run low before the fall harvest, particularly as demand remains strong both at home and abroad.
The agency’s estimate of consumption in the three months ended February 29 unexpectedly rose 3.1% to a record 3.64 billion bushels.
The USDA also said that U.S. farmers will plant would 95.9 million acres of corn, a 75-year high and above market expectations for 94.72 million. Farmers in Idaho, Iowa, Minnesota, North Dakota and South Dakota are forecast to plant record-breaking amounts of corn this year, according to the report.
According to the data, the corn acreage numbers indicate a potential record-large corn crop of 14.5 billion bushels in 2012.
The warmest March since records began in 1971 is encouraging farmers to plant corn early, as this usually leads to higher yields.
Meanwhile, some market analysts doubted the USDA reports and expected the data to be subject to downward revisions in the future.
Traders are betting that the planting won’t necessarily translate into a historically large harvest as dry weather in parts of the U.S. corn belt could undercut government projections.
Also, a rally in soybean prices could lead some farmers to change their plans for plantings at the last minute, switching land to soybeans from corn.
The U.S. produced 38% of the world’s corn last year, making it the both world’s largest corn producing nation and the largest exporter of the grain.
Elsewhere on the Chicago Mercantile Exchange, wheat for May delivery fell 0.75% to trade at USD6.5163 a bushel, while soybeans for May delivery shed 0.4% to trade at USD14.1513 a bushel, just below a seven-month high.
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