Nineteen of 25 traders surveyed by Bloomberg expect corn to advance next week. Lower-than-average humidity and dry soil will curb crop development in Argentina and southern Brazil through at least Jan. 7, according to T-Storm Weather LLC, a forecaster in Chicago. Argentina is the world’s biggest corn shipper after the U.S. and typically starts reaping its grain in March.

While prices doubled in the past two years as record demand eroded inventories, corn fell as much as 27 percent since the end of August as the U.S. forecast the biggest-ever global harvest. The grain rallied 10 percent in the past two weeks on mounting concern that South American weather will undermine that prediction and drive stockpiles lower. Argentina and Brazil are expected to produce 90 million metric tons, enough to supply the 27-nation European Union for 17 months, USDA data show.

“We have already caused irreversible damage to the corn crop,” said Dave Marshall, a farm marketing adviser at Toay Commodity Futures Group LLC in Nashville, Illinois. “The dry weather trend of the past five weeks probably already lowered production 5 to 7 million tons below the USDA forecasts.”

Annual Advance

Corn climbed 1.2 percent this year, heading for a third consecutive annual advance. The Standard & Poor’s GSCI gauge of 24 commodities climbed 2.1 percent and the MSCI All-Country World Index of equities retreated 9.9 percent. Treasuries returned 9.6 percent, a Bank of America Corp. index shows.

Even as corn and soybean prices gain on concern that supplies will fall short of estimates, other commodities are expected to drop because slower economic growth will curb demand for raw materials. Traders expect gold, copper and raw sugar to decline next week, separate Bloomberg surveys showed.

Almost every growing area of Argentina, southern Brazil and Paraguay received less than 50 percent of average rainfall since Dec. 1, T-Storm said in a report yesterday. Rainfall in Argentina’s corn and soybean region was 75 percent below normal, the forecaster said. Some areas of central and northern Brazil may get as much as 1.3 inches of rain from Dec. 30 to 31, easing the stress on crops, T-Storm said.

Growing Season

The weather is similar to the 2008-09 growing season, when La Nina conditions associated with drought in South America strengthened in December, according to T-Storm. Combined corn output in Argentina and Brazil fell almost 18 percent in 2009, according to USDA estimates. The La Nina phenomenon typically brings heavier rainfall in Asia and drier weather in South America.

Corn may also advance because of growing demand for meat. Global production of beef, veal, pork, chicken and turkey will reach 248.6 million tons next year, 21 percent more than a decade ago and 62 percent more than in 1992, the USDA estimates. It takes about 2.6 pounds of corn to produce a pound of beef, compared with 3.6 pounds for pork and 2 pounds for chicken, according to industry estimates.

Ethanol refiners may also use more grain. About 30 percent of U.S. corn went into producing the fuel in 2008, compared with 11 percent in 2002, according to the Journal of Applied Poultry Research. Output increased 0.5 percent to 943,000 barrels a day in the week ended Dec. 16, the second-highest weekly total on record, according to the Energy Department. That may further diminish U.S. corn stockpiles that the USDA predicts will drop to the lowest since 1996 by Aug. 31.

Money Managers

Hedge funds and other money managers are also bullish corn. They are holding a net-long position, or bets on higher prices, of 126,461 futures and options, according to the Commodity Futures Trading Commission. While speculators trimmed their bets by 69 percent from this year’s high in January, they have held a net-long position since April 20, 2010.

Traders are the most bearish on gold since July 29, with 13 of 24 surveyed expecting the metal to decline next week. Futures declined 19 percent from a record close of $1,891.90 an ounce reached on Aug. 22 on the Comex in New York, within 1 percentage point of a bear market.

Holdings in gold-backed exchange-traded products fell about 35 tons since Dec. 14, data compiled by Bloomberg show. At 2,326.2 tons, the total is still within 1.5 percent of the record set that day and valued at $114.9 billion.

Worst Performance

Nine of 24 traders and analysts surveyed by Bloomberg expect copper to decline next week. Copper for three-month delivery fell 23 percent to $7,425 a ton this year, heading for its worst performance since 2008.

Three of seven surveyed expect raw-sugar to decline next week, and one was bullish. The commodity fell 27 percent this year to 23.54 cents a pound on ICE Futures U.S. in New York.

Eighteen of 26 people surveyed expect soybeans to rise next week. Prices have dropped 15 percent this year to $11.99 a bushel in Chicago.

Economies in the euro region will contract 0.2 percent next year from 1.6 percent growth this year, according to the median of 21 economist estimates compiled by Bloomberg. Expansion in China, the biggest consumer of everything from copper to energy, will slow to 8.5 percent from 9.2 percent, the median of 14 estimates shows.

“Commodity markets look vulnerable to economic weakness,” said Jeffrey Sherman, who helps manage more than $21 billion of assets at DoubleLine Capital LP in Los Angeles. “We are seeing a slowdown in Europe, weaker economic data in China, and all of this suggests that there are going to be some strong headwinds for commodities in 2012.”