Corn Futures Slump Below $4 for First Time Since 2010
Corn futures fell below $4 a bushel for the first time in four years on bets that rain will boost yields for crops in the U.S., the world’s biggest grower. Soybeans extended the longest slump since 2009.
Forecasts for cooler and wet weather in the Corn Belt over the next week will favor plants, Bethesda, Maryland-based Commodity Weather Group said in a report. The showers and mild temperatures are improving the outlook for U.S. production, already forecast by the government to climb to a record for the second straight season.
A bumper crop will help global stockpiles before the 2015 Northern Hemisphere harvest rise to the highest since 2000, a Bloomberg News survey showed. Soybean inventories will probably jump to a record, according to the average estimate by analysts. The prospect of bigger harvests are helping to keep a lid on world food inflation with the United Nations reporting prices in June down for the third consecutive month.
“Now, we have a situation where everything is perfect, and that will probably continue into the middle or end of July,” Dennis DeLaughter, an Austin, Texas-based market analyst at VantageRM.com, said in a telephone interview.
On the Chicago Board of Trade, corn futures for December delivery fell 1.5 percent to close at $3.98 a bushel at 1:15 p.m. Earlier, the price touched $3.95, the lowest for a most-active contract since July 29, 2010. The grain slumped into a bear market last week.
Global reserves may rise to 184.47 million metric tons, the Bloomberg News survey of 15 analysts showed. That would top the USDA’s June forecast of 182.65 million. The agency will update its outlook for world crops on July 11.
As of July 6, about 75 percent of the U.S. crop was in good or excellent condition, according to the USDA. About 15 percent of corn was pollinating, compared with 5 percent the previous week.
An index of 55 food items fell 1.8 percent to 206 from 209.8 in May, the UN’s Food & Agriculture Organization said on July 3. World prices were 2.8 percent lower than a year earlier.
Soybean futures for November delivery dropped 1.1 percent to $11.0375 a bushel. The price touched $11.0075, the lowest since Dec. 12, 2011. The price dropped for the eighth straight session, the longest slump since February 2009.
The USDA may raise its forecast for domestic production to 3.789 billion bushels from 3.635 billion estimated last month, according to Bloomberg’s survey. The corn harvest may be 13.931 billion bushels, similar to June’s projection.
Wheat futures for September delivery declined 0.9% to $5.5125 a bushel. The price touched $5.4775, the lowest since July 14, 2010.
To contact the reporter on this story: Lydia Mulvany in Chicago at lmulvany2
To contact the editors responsible for this story: Millie Munshi at mmunshi Patrick McKiernan, Joe Richter