The price of corn plunged Thursday after the government said corn supplies were higher than traders expected. Investors had bid the price up, expecting tighter supplies because of weather damage to crops.
Corn for March delivery fell 40 cents, or 6.1 percent, to $6.115 per bushel. The price has fallen 24 percent from June, when concerns about a potential shortage sent the price to a record $7.99.
The Agriculture Department said farmers produced 12.358 billion bushels of corn last year, slightly higher than its estimate a month ago. It predicted supplies will drop 2 million bushels to 846 million bushels by the end of this year's harvest. Analysts said traders had expected that number to be closer to 750 million bushels.
The U.S. Agriculture Department forecast would still leave both domestic and global supplies at fairly tight levels by summer's end.
The global corn supply forecast was little changed at 128.14 million metric tons. The agency said losses in Argentina due to dry weather should be offset by increased production in the United States, parts of Europe and Russia compared with a year ago.
"Everything in this report was bearish — yes, short-term maybe, but long-term, I'm still very bullish," said John Sanow, an analyst with Telvent DTN. "Demand remains very strong."
Wheat and soybean prices also fell, partly because of the drop in the price of corn. March wheat fell 36 cents, or 5.6 percent, to finish at $6.05 per bushel, while soybeans ended down 20.5 cents, or 1.7 percent, at $11.825 per bushel.
In other trading, metals prices were mostly higher after strong bond auctions in Spain and Italy. Investors were more optimistic about improving demand, particularly if Europe can gain control over its financial crisis.
Gold for February delivery rose $8.10 to finish at $1,647.70 an ounce. In March contracts, silver increased 23.4 cents to end at $30.124 per ounce, copper rose 10.3 cents to $3.649 per pound, and palladium fell $4.40 to $641.25 per ounce. April platinum settled up $2.40 at $1,500.10 an ounce.
Benchmark oil fell $1.77 to finish at $99.10 per barrel on the New York Mercantile Exchange. Heating oil dropped 1.05 cents to $3.0541 per gallon, gasoline futures fell 3.2 cents to $2.7313 per gallon, and natural gas decreased 6.6 cents to $2.737 per 1,000 cubic feet.
Orange juice futures continued to plummet. They rose to their highest since 2007 earlier this week after the Food and Drug Administration said it was testing shipments for a fungicide that had been found in low levels in orange juice. Investors have taken profits since then. Orange juice for March delivery fell 10 cents, or 5.3 percent, to $1.781 per pound.
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