Forexpros – Corn futures advanced on Thursday, trading close to the previous session’s six-week high after the U.S. Department of Agriculture cut its forecast for the U.S. corn harvest for the fourth consecutive month.
On the Chicago Mercantile Exchange, corn futures for December delivery traded at USD6.6162 a bushel during European morning trade, climbing 0.86%.
It earlier rose by as much as 1.1% to trade at a daily high of USD6.6212 a bushel. Corn prices rose to USD6.6550 a bushel on Wednesday, the highest since September 27.
In its monthly World Agricultural Supply and Demand Estimates report published Wednesday, the USDA lowered its estimate of this year’s U.S. corn crop to 12.31 billion bushels, down 1% from last month’s forecast.
The USDA also cut its forecast for U.S. inventories for the end of the 2011-12 marketing season to 843 million bushels, 2.7% below October’s estimate of 866 million. Historically, any inventory forecast under one billion bushels is viewed as tight.
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.
Global corn inventories were expected to fall to 121.6 million tonnes, down 1.2% from last month’s forecast, as a significant downgrade to Mexico’s corn output weighed.
Corn prices found further support after the USDA said it expected China’s demand for U.S. corn supplies to rise to three million metric tons in the current marketing year.
That is an increase from the two million tons the USDA predicted last month and an even bigger jump from the 980,000 tons China imported in the previous marketing year. China is the world’s second largest corn consumer.
Meanwhile, commodity traders continued to eye developments out of the euro zone surrounding the region’s debt crisis.
Italy auctioned EUR5 billion of one-year Treasury bills at an average yield of 6.08% earlier in the day, the highest since September 1997.
Following the auction, the yield on 10-year Italian bonds eased to 6.98% after rising past the 7% threshold at which Greece, Ireland and Portugal sought international bailouts on Wednesday.
Elsewhere, Greek leaders were still struggling determine who will head the new coalition government.
Elsewhere on the Chicago Mercantile Exchange, wheat for December delivery added 0.35% to trade at USD6.4525 a bushel, while soybeans for January delivery edged 0.31% higher to trade at USD11.8888 a bushel.
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