Corn dropped for a second day after the U.S. Department of Agriculture said domestic production will be bigger than forecast, boosting reserves.
The contract for December delivery lost as much as 0.6 percent to $4.6325 a bushel on the Chicago Board of Trade and was at $4.635 by 10:51 a.m. in Singapore. Prices tumbled to $4.5625 yesterday, the lowest since Aug. 15, and are set for a second weekly retreat.
U.S. farmers will collect 13.843 billion bushels of corn in 2013, the most ever and up from the 13.763 billion estimated last month, the USDA said yesterday. The average projection of 34 analysts surveyed by Bloomberg was 13.641 billion. Domestic output will rise 28 percent from the drought-reduced harvest last year, USDA data show. Global inventories will jump 24 percent to a 12-year high, it said.
“It was certainly above expectations -- most people were expecting a cut in corn yields and we had a slight increase there,” Michael Pitts, a commodity sales director at National Australia Bank Ltd., said from Sydney today. “We’re now at a very ample, sufficient balance sheet for corn. Overall, that will have a negative effect on other grains and oilseeds.”
Soybeans for delivery in November dropped 0.4 percent to $13.905 a bushel. Prices climbed 2.8 percent yesterday, the most since Aug. 26, after the USDA cut its forecast for the domestic crop by 3.3 percent.
“We had a large soybean rally last night and this is maybe just a bit of profit-taking on the back of that as corn pressures the market overall,” said Pitts.
Farmers will harvest 3.149 billion bushels of soybeans this year, down from 3.255 billion estimated in August, the USDA said. Analysts surveyed by Bloomberg had forecast 3.134 billion bushels. Yield forecasts were cut in nine Midwest states where drought expanded to 32 percent of the region on Sept. 10 from 2.2 percent three months earlier.
Wheat for December delivery fell 0.9 percent to $6.4725 a bushel.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.