Corn fell ahead of a U.S. report expected to show the country’s stockpiles rose the most in nine years, amid an outlook for a record domestic crop. Wheat was on track for the biggest quarterly drop in three years.
U.S. corn (CBOT:ZCN14) inventories on June 1 probably jumped 35% to 3.72 billion bushels, the biggest gain since 2005, based on the average of 27 estimates in a Bloomberg survey. The U.S. Department of Agriculture is set to update its estimate at noon in Washington today. Farmers will harvest 13.94 billion bushels this year, the most ever, the USDA forecast June 11.
Corn for December delivery fell 1% to $4.4275 on the Chicago Board of Trade by 7:11 a.m. local time. Prices have slumped 12% this quarter on expectation that farmers in the U.S., the biggest corn exporter, will harvest the most ever.
“You look at the U.S. crop at the moment and they’ve had pretty large acreage which has been planted and there’s a record harvest anticipated,” Graydon Chong, an analyst at Rabobank International in Sydney, said by phone. “That’s very bearish on prices.”
U.S. farmers planted 91.71 million acres (37.1 million hectares) of corn, according to a separate Bloomberg survey. That’s up from 91.69 million forecast in March by the USDA.
“American farmers produce steadily more and more corn per acre each year,” economist Dennis Gartman wrote in his newsletter. “This year shall be no different and 165-166 bushels per acre for a national average is really quite possible.”
Using the USDA’s acreage number and subtracting the average abandoned area, a yield of 164 bushels per acre would result in a crop of 14.6 billion bushels, Gartman said.
Wheat (CBOT:ZWN14) for September delivery fell 0.7% to $5.8975 a bushel, set for a quarterly drop of 15%, the most since 2011. Milling wheat for November delivery was unchanged at 187.75 euros ($256.41) a metric ton on Euronext in Paris.
“The global wheat market supply and demand situation remains bearish,” Darin Newsom, senior analyst at DTN, wrote in a market comment.
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