The price of corn soared yesterday (11 October) after the US government lowered its estimate for the size of this season’s yield.

In its monthly crop report, the government estimated that farmers will harvest 10.71bn bushels, down from last month’s forecast of 10.73bn bushels and 13% lower than last year.

As a result, corn futures for December delivery gained as much as 5% yesterday, to finish at US$7.7325 per bushel.

The drop in forecast follows the worst drought in the country for 50 years.

The USDA, however, raised its projections for soybean demand on the back of “record” sales to China.

The report forecast soybean inventories of 2.86bn bushels, up 226m based on a higher harvested area and yield. The soybean yield is projected at 37.8 bushels per acre, up 2.5. Supplies for 2012/13 are projected 10% above last month.

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