Stockpiles of corn in the U.S., the world’s biggest grower and exporter, were 12 percent lower on Sept. 1 than a year earlier and the smallest before a harvest since 2004. Prices jumped the most since July.
Inventories totaled 988 million bushels, down from 1.128 billion a year earlier, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg survey had expected 1.145 billion, on average, after the USDA on Sept. 10 predicted an increase to 1.181 billion.
“This was surprise and signals feed use was better than the USDA and analysts were expecting,” Tim Emslie, the research director at Country Hedging Inc. in Inver Grove Heights, Minnesota, said in a telephone interview. “A drop below 1 billion bushels means supplies are tight and should put a floor under the market.”
Corn futures for December delivery rose 4.4 percent to $7.475 a bushel at 8:22 a.m. on the Chicago Board of Trade, heading for the biggest gain since July 9. Before the report, the price slipped to $7.05, the lowest since July 12.
The grain has rallied 48 percent since June 15, reaching a record $8.49 on Aug. 10, as hot, dry weather in June and July damaged crops. The USDA this month predicted a harvest of 10.727 billion bushels, 13 percent below last year and down from 10.779 billion forecast in August. The agency will update its projections for major crops on Oct. 11.
About 39 percent of the corn crop was collected as of Sept. 22, up from the previous five-year average of 13 percent and a record for the date, the USDA said this week. The government on Sept. 12 said that 1.2 billion bushels of this year’s harvest were available for consumption before Sept. 1, about 700 million more than a year earlier.
“The biggest price factor for corn over the next month will be the size of the harvest,” Randy Mittelstaedt, the research director at R.J. O’Brien & Associates in Chicago, said before the report. “As prices moved lower the past month, that may have boosted demand, but we need to see an improvement in exports to put a floor under prices.”