Corn futures plunged to a three-year low after the U.S. Department of Agriculture boosted its inventory estimate by 25 percent. Soybeans dropped the most in six months as supplies topped analyst estimates by 11 percent.
Stockpiles of corn on Sept. 1 were 824 million bushels, the USDA said today in a report. That compared with the agency’s estimate of 661 million on Sept. 12. Analysts in a Bloomberg News survey last week expected 694 million, on average. Soybean inventories were 141 million bushels, and a gauge of demand tumbled 41 percent in the three months ended Aug. 31 from a year earlier.
Corn has tumbled 36 percent in 2013, the biggest drop among 24 raw materials in the Standard & Poor’s GSCI Spot Index, amid forecasts for a record crop. Demand for the U.S. grain fell the most since 1975 in the past year. The nation is the world’s top grower.
“The market is going to be dealing with big corn supplies for the next year, and that’s going to limit rallies,” Dale Durchholz, the senior market analyst at AgriVisor LLC in Bloomington, Illinois.
“Supplies are a little bigger than people expected,” Randy Mittelstaedt, the director of research at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Without a bullish surprise, the market is under pressure with the harvest coming very quickly. Yields collected so far have been better than expected.
Cheaper corn is boosting profit for Archer-Daniels-Midland Co., which makes ethanol from the grain.
rlp...thanks for a good and honest post (and corn prices are still falling)...how come food prices are not falling along with corn prices (???)...the monkey talker has been saying for over a year that food prices were going up because of higher corn prices caused by ethanol...so what is causing the increase in food prices now...?
For the record, wheat is now $6.79 a bu., yet one 60 lb. bu. of wheat (960 oz.) makes about 48 loafs of bread (at 20 oz. to the loaf)...therefore, one bu. of wheat will return a least $48.00 to the bakery (at $1.00 a loaf) or $41.21 after expenses to buy the raw product (wheat)...maybe I should stop farming and start a bakery....! $tagg...!
rlp'd good, honest and lucid!?
All very nice but the bakers are desperately trying to get the insane Progressive mandates ended. ;-)
Again any one can go over to Mundi Index and see corn prices are even now twice as high as a free market would allow.
But the Corn MOnster is correct. If this is not stopped then capacity will increase around the world until prices do decline. America farmers would do well to research what ethanol did to the sugar industry. A bubble just like Progressive subprime mortgages is building.
Then go church rather than attend the children of the corn services.
The other problem is without introducing rationality to this insanity high prices and world instability are always just one crop away. At least until low cost competition takes what were American family incomes.