The WSJ reports,"corn prices fell Friday after the U.S. Department of Agriculture forecast a record crop this autumn and said global supplies next year would be higher than analysts’ expectations.
Wheat prices also declined, while soybean futures rose.
Farmers will harvest 13.935 billion bushels of corn this year, slightly higher than last year’s record crop, the government estimated in a closely watched monthly supply-and-demand report. The forecast assumes that weather will be normal this summer in the Farm Belt, the agency said.
U.S. corn stockpiles will swell to 1.726 billion bushels before the harvest in 2015, higher than analysts had expected, the USDA said. Global stockpiles in the 2014-15 season will jump 8% to 181.7 million metric tons, the government said, reflecting, in part, big crops this year in Ukraine and Brazil.
Corn futures tumbled 40% last year as U.S. growers produced the biggest crop in history only one year after severe drought battered the Midwest and pushed prices to records. The downdraft in corn prices will lead to lower plantings of the grain this spring than last year, the USDA has said. But the government projected Friday that lower seedings would be offset by higher average yields, resulting in a larger crop overall.
Analysts said they were surprised by the higher corn-output estimate because growers are expected to plant 4 million fewer acres of the grain than they did last year.
“These are big, bearish numbers” for the corn market, said Brian Hoops, president of futures brokerage Midwest Market Solutions in Springfield, Mo. However, he said, it is early in the season and “we still have to go out and produce the crop.”
Corn futures for July delivery, the most actively traded contract, fell 7 cents, or 1.4%, to $5.09 ½ per bushel at the Chicago Board of Trade. May futures, the front-month contract, dropped 6 ½ cents, or 1.3%, to $5.06 ¾ a bushel.
The USDA estimated that the average corn yield this autumn will rise to 165.3 bushels per acre, up 6.5 bushels from last year".
