Why Corn and soybean prices down : Corn and soybean prices plunged Wednesday after federal forecasters raised their outlook for the U.S. harvest this autumn, surprising analysts who had wagered that adverse weather in parts of the Midwest would lead to smaller crops.
Corn futures sank more than 5% and touched a 10-month low, while soybeans slid 6% and wheat dropped 3%.
The U.S. Department of Agriculture estimated that U.S. corn production would total 13.7 billion bushels on yields of 168.8 bushels an acre. The forecasts are the first of the growing season to be based on surveys of farmers and field observations, and they sharply exceeded analyst estimates of about 13.3 billion bushels on yields of 164.4 bushels an acre.
The projected corn crop would be the third-largest in the U.S. after the record harvests of the past two years. Last month, the government had estimated production at 13.5 billion bushels on yields of 166.8 bushels per acre.
Corn futures for September delivery CU5, -0.34% declined 20 3/4 cents, or 5.5%, to $3.55 3/4 a bushel on the Chicago Board of Trade. Prices earlier dropped to $3.46 1/2 a bushel, the lowest for a front-month contract since October.
The revised production figures stunned analysts, who had anticipated estimates would decline after persistent rains early in the growing season drenched parts of the eastern Midwest, leaching nutrients from the soil in corn fields and preventing some farmers from seeding soybean crops.
"The crops fared much better than what the market was thinking," said John Kleist, director of research for brokerage Ebottrading.com. "That was enough to send the market into a tailspin."
Soybean prices SX5, -0.43% tumbled to a nearly one-month low after the USDA's estimates for production and yields came in much higher than analysts' expectations.
The USDA estimated soybean production at 3.9 billion bushels on yields of 46.9 bushels an acre. Analysts had expected production to total 3.7 billion bushels on yields of 44.6 bushels an acre. In July, the government pegged production at 3.9 billion bushels on yields of 46 bushels per acre.
Corn futures sank more than 5% and touched a 10-month low, while soybeans slid 6% and wheat dropped 3%.
The U.S. Department of Agriculture estimated that U.S. corn production would total 13.7 billion bushels on yields of 168.8 bushels an acre. The forecasts are the first of the growing season to be based on surveys of farmers and field observations, and they sharply exceeded analyst estimates of about 13.3 billion bushels on yields of 164.4 bushels an acre.
The projected corn crop would be the third-largest in the U.S. after the record harvests of the past two years. Last month, the government had estimated production at 13.5 billion bushels on yields of 166.8 bushels per acre.
Corn futures for September delivery CU5, -0.34% declined 20 3/4 cents, or 5.5%, to $3.55 3/4 a bushel on the Chicago Board of Trade. Prices earlier dropped to $3.46 1/2 a bushel, the lowest for a front-month contract since October.
The revised production figures stunned analysts, who had anticipated estimates would decline after persistent rains early in the growing season drenched parts of the eastern Midwest, leaching nutrients from the soil in corn fields and preventing some farmers from seeding soybean crops.
"The crops fared much better than what the market was thinking," said John Kleist, director of research for brokerage Ebottrading.com. "That was enough to send the market into a tailspin."
Soybean prices SX5, -0.43% tumbled to a nearly one-month low after the USDA's estimates for production and yields came in much higher than analysts' expectations.
The USDA estimated soybean production at 3.9 billion bushels on yields of 46.9 bushels an acre. Analysts had expected production to total 3.7 billion bushels on yields of 44.6 bushels an acre. In July, the government pegged production at 3.9 billion bushels on yields of 46 bushels per acre.
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