Corn futures plummeted more than 10% in early trading on Thursday after a U.S. government report said farmers were able to seed far more corn acres this spring than many analysts expected and that supplies are not as tight as many thought.
Despite excessively wet conditions, a scramble to get corn seeded in key growing areas that was fueled by high prices has set the stage for a potentially record-large corn crop, and conversely a smaller soybean crop, according to the report issued Thursday by the U.S. Department of Agriculture. Higher-than-expected supplies of U.S. corn struck another bearish note for prices, pushing nearby CBOT corn down more than 70 cents early and back months down the 30-cent limit.
The declines leave corn with the biggest monthly fall since June 2009. The July corn contract has entered its delivery period and is trading without limits. CBOT wheat futures plunged as well, dropping 8% early, and soybeans dropped 2%, as the USDA report eases some of the concerns over key crop supplies in the world's top producer and exporter.
``There are some big surprises in this report,'' said Karl Setzer, commodity Trading Advisor for MaxYield Cooperative in West Bend, Iowa. ``All in all, what this shows us in the quarterly stocks report, we are not using grain at the pace we thought we were.''
USDA said farmers planted 92.282 million acres with corn this spring, above an average trade estimate for 90.767 million acres and well above the USDA's June 10 forecast of 90.700 million acres. The department estimated quarterly corn stocks as of June 1 at 3.670 billion bushels, above an average trade estimate for 3.302 billion and compared with 4.310 billion a year ago.
Traders said the fact that farmers were able to get so much corn in the ground despite flooding and heavy rainfall through the U.S. Midwest underscored how recent high prices pushed farmers to plant corn over soybeans despite the adverse conditions.
``Getting this much acreage planted is a surprise,'' said Shawn McCambridge, an analyst with Prudential Bache Commodities.
The government pegged soybean acreage at 75.208 million, below an average trade estimate of 76.530 million and below its March forecast of 76.609 million. But soybean stocks at June 1 were pegged by the USDA at 619 million bushels, above trade estimates for 596 million and last year's USDA estimate of 571 million bushels.
USDA estimated wheat stocks as of June at 861 million bushels, above trade estimates for 826 million and compared with 973 million a year ago. At 9:47 a.m. CDT (1447 GMT), CBOT July corn was down 70 cents, or 10.1%, at $6.27-3/4. July wheat was off 51-1/4 cents, or 8%, at $5.90, and nearby CBOT soybeans for July delivery were down 26 cents, or 2%, at $13.08-1/4.
Losses on this, the last day of the month, will leave the front-month wheat contract with its biggest monthly loss in at least two years. Soybeans are heading for losses of nearly 3% for June, which would be their third straight monthly fall, while corn has slid for a second straight month and is already down 6% for the period.
(Reporting by Carey Gillam; additional reporting by Julie Ingwersen in Chicago, Michael Hogan in Hamburg, and Naveen Thukral in Singapore; editing by Jim Marshall)