Corn Drops Most in Four Weeks as U.S. Production Tops Estimatesby
USDA sees larger U.S. acreage partly offsetting lower yield
Soybean, wheat futures also drop in Chicago after report
Corn futures slumped by the most in four weeks after a U.S. government report showed domestic production topping analyst expectations.
Output will reach a record 15.057 billion bushels, the U.S. Department of Agriculture said in a report Wednesday. Analysts surveyed by Bloomberg forecast 15.029 billion, on average. While the USDA dropped its yield estimate by a bushel per acre, in line with analyst expectations, the agency said farmers will harvest 200,000 more acres than forecast last month.
“While yield came down some, the total production didn’t come down as much as it could have,” Lawrence Kane, market adviser for Stewart-Peterson Group in Yates City, Illinois, said in a telephone interview.
Futures for December delivery fell 2.5 percent to close at $3.37 a bushel on the Chicago Board of Trade, the contract’s biggest slide since Sept. 13. November soybean futures fell for a fourth straight session, and December wheat dropped 2.6 percent, the most in six weeks.
Helping to limit the price slide, the government’s forecast for U.S. inventories of corn, soybeans and wheat trailed analyst estimates, partly amid an improving export outlook. U.S. wheat is becoming more competitive in North Africa, and sales commitments for corn are “well above” last year, the agency said. To reach the government’s targets, the U.S. will need to have a strong shipment pace in the next few months, before South American farmers collect their next corn and soybean crops, Kane said.
“U.S. crop yields are now largely known, and the market will quickly shift focus to South American planting progress and subsequent crop conditions,” Rabobank analysts said in an e-mailed report.