Chicago | Reuters — U.S. corn futures plunged more than four per cent on Thursday in the market’s steepest drop since mid-August after the U.S. Agriculture Department forecast 2016 planted acreage well above trade expectations.
Soybeans firmed on USDA’s lower-than-expected soybean acreage and quarterly stocks estimates, although gains were limited by spillover pressure from corn.
Wheat climbed on short covering, led by spring wheat futures which gained nearly three per cent after the government pegged planted acreage below expectations at the lowest since 1972.
Corn fell to contract lows as the USDA report showed U.S. farmers are planning to boost seedings by 6.4 per cent this year to 93.601 million acres, which would be the third-highest level since 1944.
“That’s going to be the headline grabber: the big surge in corn acres,” said Arlan Suderman, chief commodities economist for INTL FCStone.
“Farmers prefer to plant corn. That’s their desired crop. They see the most opportunity there for being able to capture something down the road if we have a weather scare,” he said.
Soybean seedings were seen at 82.236 million acres, which would be the third-highest ever but below the average trade forecast.
However, analysts said final acreage has would likely shift due to firmer soybean prices since USDA’s survey was concluded earlier this month and as some farmers in flooded areas of the South may replant corn fields with soybeans.
“This survey was taken a little over four weeks ago, and a lot has happened during these last four weeks,” said Ted Seifried, vice-president and chief market strategist for Zaner Ag Hedge.
USDA also pegged March 1 corn stocks at 7.808 billion bushels, above the average analyst estimate of 7.801 billion and the largest for the quarter since 1987.
Soybean stocks rose to 1.531 billion bushels, below trade expectations for 1.556 billion, while wheat stocks rose to 1.372 billion bushels, compared with forecasts for 1.356 billion.
Chicago Board of Trade May corn dropped 15-1/2 cents, or 4.2 per cent, to $3.51-1/2 a bushel. The contract ended down 1.5 per cent for the month, the fifth monthly drop in six months for a spot contract.
CBOT May soybeans rose 1-3/4 cents to $9.10-3/4 a bushel, gaining 5.8 per cent in March for the strongest monthly spot-contract gain in 10 months.
CBOT May wheat rose 9-1/2 cents to $4.73-1/2 per bushel, up two per cent for the day and 4.5 per cent in the month.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Tom Polansek and P.J. Huffstutter in Chicago.