NEW YORK (AP) — Corn farmers caught a break on Friday.
After months of falling prices, corn rallied after the government reduced its estimate for the size of last year's crop and lowered its projection for corn supplies. The price of the grain has slumped since last spring, when the U.S. Department of Agriculture first projected that farmers would produce a record harvest.
The USDA cut its estimate for last year's crop by 64 million bushes to 13.9 billion bushels. Traders had been expected a crop of about 14.1 billion. The government agency also lowered its projection for corn supplies by 161 million bushels to 1.6 billion bushels.
"This should change the whole dynamic of the market now," said Mike Zuzolo, president of Global Commodity Analytics. "Supply is going to be harder to get."
The price of corn for March delivery surged 20.8 cents, or 5 percent, to $4.33 a bushel, its biggest gain since August 2013. On Thursday, the price of the grain had dropped to its lowest price in nearly 3 ½ years ahead of the report.
While corn rose, wheat slumped after the report said that projected stocks rose because of lower-than-expected use of the grain. March wheat fell 15 cents, or 2.6 percent, to $5.69 a bushel.
In other agricultural trading, March soybeans rose 4.75 cents, or 0.4 percent, to $12.79.
Gold rose after a weaker-than-expected jobs report boosted speculation that central banks would keep up their stimulus for longer. Gold for February climbed $17.50, or 1.4 percent, to $1,246.90 an ounce.