Corn futures tumbled to a 33-month low as forecasts for cool, wet weather improved prospects for a crop expected to be a record in the U.S., the world’s biggest grower. Wheat fell to a one-year low, and soybeans declined.
Precipitation is expected in Iowa, the top U.S. grower of corn and soybeans, and in Illinois over the next six to 10 days, Commodity Weather Group said today in a report. Rain in the Mississippi River Delta region also will benefit crops. Yields in southwestern Illinois will jump 60 percent from last year’s drought-damaged harvest to 183.3 bushels an acre, field samples taken yesterday by Doane Advisory Services Co. showed.
Farmers will harvest more corn than ever this year and 29 percent more than 2012, when the worst drought since the 1930s damaged Midwest fields, the U.S. Department of Agriculture said. Prices are 38 percent lower than a year ago, making global food cheaper and reducing feed costs for meat companies including Tyson Foods Inc. and ethanol refiners including Archer-Daniels-Midland Co. The USDA forecast domestic corn inventories will more than double by September 2014.
“The buyers out here have no fear, whether it’s the livestock feeders or an ethanol producers,” Dale Durchholz, a senior market adviser at Agrivisor LLC in Bloomington, Illinois, said by telephone. “The crop is going to be big enough to see a fairly big build in ending stocks. I don’t see any rush to buy.”
Corn futures for December delivery tumbled 2.5 percent to settle at $4.855 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.82, the lowest for a most-active contract since Oct. 5, 2010.
The domestic harvest will jump to 13.95 billion bushels this year, up from a six-year low of 10.78 billion in 2012, the USDA said July 11. Stockpiles on Sept. 1, 2014, before next year’s harvest, will jump to 1.959 billion bushels from an estimated 729 million this year, the agency said.
Nationwide, yields are expected to jump to 156.5 bushels an acre from 123.4 bushels last year, according to the USDA. Growers seeded 97.4 million acres, the most since 1936, and are forecast to harvest corn from 89.1 million acres.
Food costs have dropped in six of the past nine months and are down 11 percent since reaching a record in February 2011, according to the United Nations. Shares of Springdale, Arkansas-based Tyson Foods climbed 39 percent this year through yesterday as lower feed costs helped boost earnings at its chicken and pork units.
Expected rains will help improve conditions for corn after a month of “not ideal” weather, especially in Iowa, where a hot, dry spell probably reduced yield prospects from earlier forecasts, Christopher Narayanan, the head of agricultural research at Societe Generale SA in New York, said in a telephone interview.
Wheat futures for September delivery fell 0.9 percent to $6.5375 a bushel on the CBOT, after touching $6.505, the lowest for a most-active contract since June 19, 2012.
Soybean futures for delivery in November slipped 2.2 percent to $12.6025 a bushel in Chicago, the first decline in three sessions.