The Atlanta Journal-Constitution
Corn falls on bigger forecast of supply
Many analysts, traders thought planting delays would hurt crop yields.
Corn futures slumped after the U.S. Department of Agriculture delivered a production forecast that was bigger than analysts expected as plants have been able to do relatively well despite a delayed growing season.
Record spring flooding led to a historically delayed planting season in the Midwest. The late start meant many analysts and traders have been expecting a negative impact for yields. But crops have proved to be resilient, partly thanks to better weather as the growing season progressed. The USDA has consistently delivered a rosier outlook for supplies than the market predicted, sparking a slump for prices.
Still, harvesting is behind normal stages for many farmers. That means crops are vulnerable to bouts of cold, especially with snow forecast for swaths of the U.S. Plains and Midwest this week that could end up stifling yields.
“The market once again is stymied by a larger than expected area and a higher than expected yield for corn,” said Michael McDougall, a broker at Paragon Global Markets in New York. “What’s next? The storm won’t have any ill effects?”
Corn production will total 13.779 billion bushels, the agency said Thursday in its monthly World Agricultural Supply and Demand Estimates report. Analysts surveyed by Bloomberg had forecast 13.588 billion on average. Futures extended declines after the report’s release.
Soybean futures moved in the opposite direction, gaining in Chicago after the USDA lowered its production estimate for the oilseed to 3.55 billion bushels, trailing the average analyst estimate.