Corn futures fell to the lowest since 2010 on speculation that a record U.S. crop will boost world reserves next year to the highest since 2002. Wheat dropped to the cheapest in 13 months, while soybeans gained.
Farmers in the U.S., the world’s largest corn grower, will collect a record 13.763 billion bushels, 28% more than last year’s output damaged by drought, the Department of Agriculture said yesterday. While the increase was less than analysts forecast, the harvest will help boost global production by 11% and increase reserves before the 2014 harvest by 22%.
“We are not short of corn supplies this year,” Shawn McCambridge, the senior grain analyst for Jefferies Bache LLC in Chicago, said in a telephone interview. “During the next 45 days, the crops need more rain and to avoid a freeze to boost yields. Some crops are starting to be stressed from dry weather since earlier in July.”
Corn futures for December delivery tumbled 3.6% to close at $4.4725 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop for a most-active contract since June 28. Earlier, the price touched $4.4575, the lowest since Sept. 3, 2010. This year, the price has plunged 36%, the most among 24 raw materials in the Standard & Poor’s GSCI Spot Index.
Losses expanded at midday after the National Weather Service forecast more rain in parts of Minnesota and South Dakota on Aug. 15 and for Iowa and Illinois beginning Aug. 19, Roy Huckabay, an executive vice president for the Linn Group on Chicago, said in a telephone interview.
“The rains will help the plants fill kernels and boost yields” from the 154.5 bushels an acre forecast by the USDA yesterday, he said. “The crop is going to get bigger.”
Wheat futures for December delivery dropped 1.2% to $6.415 a bushel. Earlier, the price touched $6.395, the lowest since June 18, 2012.
This year, world production will rise 7.6% to a record 705.38 million metric tons, up 1.1% from the forecast in July, the USDA said yesterday.
The outlook for lower supplies drove soybeans higher for the second straight day. The USDA yesterday cut its forecast for domestic production after excess rain in May and June reduced acreage and hurt yields.
Soybean futures for November delivery climbed 0.2% to $12.2775 a bushel. Yesterday, the price jumped 3.6%, the most since June 25, 2012.
Corn is the biggest U.S. crop, followed by soybeans, hay and wheat, USDA data show.