Corn futures fell to a seven-week low and soybeans plunged the most in six years after the US unexpectedly raised its crop forecasts, citing higher yields than anticipated.
The corn harvest will be 13.686 billion bushels, compared with 13.53 billion projected in July, the US Department of Agriculture said Wednesday after its first survey-based review for this year’s crop. The forecast topped the 13.332 billion average of 31 analysts surveyed by Bloomberg News. Last year, output rose to a record 14.216 billion. The soybean outlook also exceeded expectations.
The government report surprised investors because the crop year began with record June rain in Illinois, Indiana and Ohio, washing away newly sown crops. The USDA forecast yields at all- time highs in Iowa, Minnesota, Nebraska, South Dakota, Wisconsin and Michigan.
“Production is better than expected because record yields in the western Midwest offset losses in the east from too much rain,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “It’s a supply bear market and that means consumers will be very patient to buy ahead.”
Corn futures for December delivery fell 5 percent to close at $3.68 a bushel at 1:20 p.m. on the Chicago Board of Trade. The price touched $3.575, the lowest for a most-active contract since June 22.
Soybean futures for November delivery tumbled 6 percent to $9.1325 a bushel, the biggest drop since July 7, 2009.
Bloomberg News, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.
