(Bloomberg) – Corn fell for an eighth day, touching the lowest level since October 2010, after the U.S. raised estimates for planting in the largest grower and exporter of the grain. Wheat and soybeans gained.
U.S. farmers seeded 97.4 million acres (39.4 million hectares) of corn, the most since 1936, the U.S. Department of Agriculture reported June 28. Analysts in a Bloomberg survey had expected 95.431 million. The wheat area reached a four-year high of 56.53 million acres and soybeans were sown on a record 77.728 million acres. The report showed potential for large supplies, according to Goldman Sachs Group Inc.
Corn for delivery in December fell as much as 1.4 percent to $5.0375 a bushel on the Chicago Board of Trade, the lowest for a most-active contract since Oct. 8, 2010. The grain was at $5.07 by 5:29 a.m.
“The combination of a huge area planted and improving yield prospects should result in record U.S. corn production,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), wrote in a report today. “This, in turn, will rebuild global grain inventories.”
U.S. farmers, the biggest corn and soybean growers, are forecast by the USDA to gather record crops, while the United Nations’ Food & Agriculture Organization expects the largest world wheat harvest ever. That will cut costs for buyers including Archer-Daniels-Midland Co. (ADM), the largest corn processor, and Tyson Foods Inc. (TSN), while further curbing food prices.
Farmers’ Intentions
Soybeans for November delivery rose 0.1 percent to $12.5275 a bushel, reversing a decline of as much as 1.1 percent. Wheat for September delivery added 0.5 percent to $6.6125 a bushel in Chicago, while milling wheat for November delivery traded in Paris was unchanged at 193.75 euros ($252.90) a metric ton.
The USDA report probably reflected farmers’ intentions, rather than actual planted areas, in parts of the north-central corn belt, Morgan Stanley analysts including Bennett Meier wrote in a report June 28. The agency may lower its acreage estimate from August to reflect the full scale of areas not planted due to field work delays and rain, Morgan Stanley said.
About 65 percent of the corn was rated in good or excellent condition on June 23, up from 56 percent a year earlier, and 65 percent of soybeans earned top ratings versus 53 percent, the USDA said in a report last week.
