Corn slides to 9-month low, wheat down on higher stocks
SINGAPORE: Chicago corn dropped to a nine-month low on Monday, falling 4 percent and suffering its biggest two-day slide since January 2010, with larger-than-expected US stockpiles piling pressure on the market.
Wheat declined to its lowest in three weeks, while soybean prices remained on the backfoot after the US Department of Agriculture in its quarterly stocks report last week announced higher reserves than market estimates.
Chicago Board of Trade most-active May corn fell as much as 4 percent to $6.67-1/2 a bushel, the lowest since late June.
“Corn bulls were disappointed as the market was looking for much lower supplies,” said Abah Ofon, a commodities analyst at Standard Chartered Bank in Singapore.
“Earlier the concern was the market would struggle to source supplies but now it looks like it can actually hold out until new-crop supplies come in.”
The USDA surprised the market with forecasts for old-crop corn supplies, estimating the stockpile at the lowest in nine years, up from an average estimate of the lowest in 15 years.
It pegged corn stocks as of March 1 at 5.399 billion bushels, above the average analyst estimate of 5.013 billion bushels. The USDA also said farmers would plant the highest corn acreage since 1936.
The USDA showed corn disappearance for the Dec-Feb quarter tumbled 27 percent from a year earlier. USDA chief economist Joe Glauber said the figures implied the smallest corn consumption for that period since 2002.
Although corn and soybean stocks were larger than expected, three years of declining production have depleted supplies and leave little leeway for a bad harvest. March 1 stocks for both crops were the smallest total on that date since 2004.
This year farmers are expected to increase overall seedings after the worst drought since 1934 last summer reduced yields and sent corn and soybean futures to a record last year. But higher prices have dented demand.
Wheat slid to its lowest in three weeks and soybeans remained under pressure.
CBOT May wheat fell as much as 0.9 percent to $6.81-1/4 per bushel, the lowest since early March, while May soybeans gave up 0.3 percent to $14.00-1/2 a bushel.
Soybean stocks of 999 million bushels were 7 percent larger than the average trade guess, and also topped even the most bearish forecast.
Plantings of all varieties of US wheat were estimated at 56.4 million acres, up 1 percent from last year, while stocks of wheat were up 3 percent from a year ago. Wheat stocks, at 1.234 billion bushels, were 5 percent larger than expected.
Large speculators raised their net long position in Chicago Board of Trade corn and soybean futures in the week to March 26, regulatory data showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat. Source Reuters
Published: Zarai Media Team