Chicago | Reuters –– U.S. wheat futures sank to a six-year low on Thursday and corn futures hit an 11-week low after the agriculture department said farmers had planted more of the grains than expected.
Soybean futures soared to two-week highs as plantings fell short of analysts’ estimates.
The U.S. Department of Agriculture (USDA), in an acreage report, said domestic all-wheat plantings totaled 50.816 million acres, topping analysts’ forecasts for 49.869 million and the agency’s March estimate of 49.559 million.
Corn seedings were 94.148 million acres, above the high end of analysts’ estimates. On average, they had expected acreage to fall from the government’s March forecast of 93.601 million.
The robust plantings will likely add to an ample supply of grains already in storage. USDA, in a separate report, said corn inventories as of June 1 were the biggest since 1988 while soybean stocks for that period were the third-biggest ever.
“The surprise is in the corn acreage numbers,” said Brian Hoops, analyst for Midwest Market Solutions. “I remember saying after the March report that we would not see that many corn acres.”
December wheat closed almost flat at $4.65-1/2 a bushel on the Chicago Board of Trade (all figures US$). The most-active contract reached $4.36, its lowest price since June 2010.
December corn lost 11-3/4 cents to $3.71-1/4 a bushel. The most-active contract touched $3.65-1/4, its lowest since April 13.
November soybeans surged 40-3/4 cents to $11.53-1/4 a bushel. The most-active contract rose to $11.60-3/4, its highest price since June 15.
The acreage report showed that farmers planted a record 83.688 million soybean acres, above the government’s March forecast of 82.236 million but below analysts’ estimates for 83.834 million .
“People out there had a ‘fear number’ that was 2.5 to 3 million acres higher than the average trade guess,” said Jim Gerlach, president of A/C Trading. “When that fear wasn’t realized, they considered it bullish.”
Lower-than-expected plantings indicate the soybean market will be more susceptible to rallies driven by threatening U.S. weather, traders said.
Corn and soybean prices have been swayed recently by forecasts, against a backdrop of the risk that a La Nina weather pattern could trigger a dry summer in the U.S. Midwest.
“With the export demand for beans so strong, we really need to raise a good crop here in the U.S.,” said Brian Basting, commodity research analyst for Advance Trading. “There’s a lot of volatility ahead.”
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer and Karl Plume in Chicago, Colin Packham in Sydney and Gus Trompiz in Paris.