Corn prices plummet; beans go through the roof

Corn prices plummet; beans go through the roof

From news wires | Posted: Thursday, May 10, 2012 12:49 pm

Corn prices plunged Thursday after the government predicted corn production would set a record this summer and inventories would more than double from August this year to August 2013.

Soyban prices did just the opposite.

The U.S. Agriculture Department forecast corn production at 14.8 billion bushels compared with 12.4 billion bushels a year ago. It also expects yields to reach a record 166 bushels per acre and corn stockpiles on hand this August to total 851 million bushels.

A mild spring and ample moisture allowed farmers to get an early start on planting this year. They are expected to plant 91.9 million acres in corn, the most since 1937. Many hoped to capitalize on prices that have been at or above $6 per bushel for much of the year because of smaller stockpiles, strong export demand and ethanol production.

Telvent DTN analyst John Sanow noted that corn production has fallen short of the government's May forecast in the last few years.

Corn for July delivery fell 19.75 cents, or 3.3 percent, to finish at $5.875 per bushel. That's the lowest since Dec. 16 when corn ended at $5.83 per bushel. July soybeans rose sharply, 25 cents to $14.5525 per bushel.

Corn reserve supplies of 1.88 million bushels will more than double by Aug. 31, 2013, before the harvest, from a 16-year low of 851 million projected for this year, USDA said. The USDA in February forecast 1.616 billion bushels.

Corn futures have tumbled 14 percent in the past year.

Corn is the biggest U.S. crop, with a 2011 value of $76.5 billion, government figures show.

U.S. soybean inventories will fall before the 2013 harvest after drought cut production in South America, increasing overseas demand for supplies from the Midwest, the government said.

Reserves on Aug. 31, 2013, will total 145 million bushels down from a revised 210 million projected for this year, the USDA said in a report.

"U.S. supplies will be tight until next January when South America will start harvesting its next crop," said Tim Emslie, the research manager for Country Hedging Inc. in Inver Grove Heights, Minn.

Soybeans prices have risen 18 percent this year on forecasts for reduced production in Brazil and Argentina, the two biggest producers after the United States. On May 2, the commodity touched a 45-month high at $15.125.

This year's U.S. soybean crop is projected at 3.205 billion bushels, down from 3.25 billion forecast in February and 3.056 billion harvested a year earlier. Yields may rise to 43.9 bushels an acre from an estimated 41.5 bushels last year, the USDA said.

Soybeans are the second-biggest U.S. crop, valued last year at $35.8 billion, government figures show.

Corn prices plummet; beans go through the roof