Corn leads crop rebound as USDA cuts output forecasts amid rains

Reduced Costs

ADM, the grain processor that makes animal feed, sweeteners and ethanol, is “optimistic” about margins in 2014 and 2015 because of rising corn supply, Chief Operating Officer Juan Luciano said on a conference call Aug. 6. Shares of the Decatur, Illinois-based company are up 41% this year.

Tyson Foods, the largest U.S. meat processor, will report a 37% gain in profit to $797.6 million this year according to the mean of eight analysts estimates compiled by Bloomberg. Shares of the Springdale, Arkansas-based company rallied 61% this year. Tyson handled an average of 41.4 million chickens, 403,000 hogs and 132,000 head of cattle last year, data on its website show.

Crop Yields

Average corn yields this year may reach 154.4 bushels an acre, down from 156.5 estimated in July and up from 123.4 in 2012. Analysts surveyed by Bloomberg expected 158 bushels, on average. Harvested acreage was forecast at 89.1 million acres this year, unchanged from last month, the USDA said.

Domestic reserves of corn on Aug. 31, 2014, before next year’s harvest, will total 1.837 billion bushels, down from 1.959 billion (49.77 million metric tons) forecast in July, the USDA said. Analysts surveyed by Bloomberg were expecting 2.013 billion, on average. Inventories before the start of this year’s harvest will total 719 million bushels, compared with 729 million forecast a month earlier and 989 million last year.

Wheat futures for December delivery advanced 0.3% to $6.49 a bushel on the CBOT. Prices rallied as much as 1.7% after the report and dropped 0.7% before it.

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