Fall-harvest corn plunges as USDA shocks with acres jump

U.S. futures prices for corn to be harvested this autumn plunged more than five per cent on Friday to the lowest point in more than a year after the U.S. Department of Agriculture said farmers have planted two million more acres of the crop than expected.

Favourable crop weather around the U.S. Midwest reassured investors that the fall harvest could be the largest ever, boosting U.S. stocks to two billion bushels by the end of next season and replenishing 16-year low stocks this summer.

Soybean futures for autumn-delivered supplies slid nearly two per cent on good crop weather and on spillover pressure from sinking corn, shrugging off a USDA plantings estimate that was 200 million acres below trade expectations.

Wheat futures on the Chicago Board of Trade (CBOT) slipped to a one-year low on harvest pressure, falling for a seventh straight session in the longest losing streak for the spot contract in 3-1/2 years.

“The corn number coming in higher than March intentions is a shocker here. Two million acres above expectations is considered bearish,” said Joe Vaclavik, president of Standard Grain.

“We were a bit lighter on acreage in beans, and stocks came in a little below expectations,” he said.

Based on a survey of 70,000 farmers, USDA pegged corn plantings at 97.379 million acres — two million acres, or two per cent, more than expected by analysts.

Soybean plantings were a record 77.728 million acres, up one per cent from last year, but 200,000 acres lower than the average forecast.

Good crop weather

Nearly ideal corn- and soybean-growing weather is expected in early July in the U.S. Midwest, with moderate temperatures and occasional showers likely, an agricultural meteorologist said on Friday.

“It looks real good for the next two weeks, there will be regular showers and cooler temperatures in all areas,” said Andy Karst, meteorologist for World Weather Inc.

Tighter-than-anticipated old-crop stocks of corn and soybeans fueled gains in nearby contracts of both commodities, though gains were restrained by deferred-month declines.

“Old-crop corn stocks and old-crop bean stocks are still going to remain razor tight. But the new crop production potential and the good weather trumps the stocks,” said Don Roose, president of U.S. Commodities.

USDA pegged the June 1 U.S. corn stockpile at 2.764 billion bushels, below the average trade view of 2.845 billion, and soybean stocks at 718.3 million bushels, below the 745 million-bushel trade outlook.

CBOT July corn rose 12 cents to $6.79-1/4 a bushel, up 1.8 per cent on the day and 2.6 per cent on the week. The spot contact posted its first monthly gain in five months, rising 2.6 per cent, but declined for the third consecutive quarter.

New-crop December corn fell 27-1/2 cents to $5.11 a bushel, a 5.1 per cent decline that was the largest since March 28, when USDA released its first acreage forecast of the season.

July soybeans gained 16 cents, or one per cent, to $15.64-1/2 a bushel, the highest point for a spot contract since October. The spot contract gained 4.7 per cent on the week, the most in 11 months, while rising for a third consecutive month and posting its strongest quarterly jump in five quarters.

New-crop November dropped 23-1/4 cents, or 1.8 per cent, to a one-month low of $12.52 a bushel.

CBOT July wheat fell 15 cents, or 1.2 per cent, to $6.48-1/2 a bushel, the lowest level for a spot contract since June 20, 2012. The contract has declined 8.3 per cent in its seven-session slide.

Spot wheat posted its steepest weekly decline in nearly 13 months, the largest monthly decline since February and the third straight quarterly drop.

Commodity funds sold an estimated net 25,000 corn contracts, 8,000 soybean contacts and 5,000 wheat contracts on the day, trade sources said.

— Karl Plume reports for Reuters from Chicago. Additional reporting for Reuters by Sam Nelson and Julie Ingwersen in Chicago.

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