Grain prices plunged more than 10%, with wheat falling below $6 a bushel for the first time since July, after data showed that US farmers had overcome a historically wet spring to plant the second biggest corn acreage since World War II.
US growers planted 92.3m acres with corn, 1.5m acres more than the market had expected. Estimates for US corn inventories as of the start of the month were also pegged higher than had been thought.
Both sets of statistics eased concerns over supplies of a grain which have been forecast to remain historically tight until at least autumn 2012 – expectations which drove corn futures to a record high earlier this month.
"The report was a bearish surprise on corn acres and corn stocks," broker US Commodities said.
"The bull fight is out of the market without a weather threat."
In a further blow to sentiment, the International Grains Council lifted by 17m tonnes, to 858m tonnes, its forecast for world corn production in 2011-12, citing "larger US sowings and improved Black Sea production prospects".
Prices plunge
In Chicago, the July corn futures contract, freed of daily trading limits by the expiry process, tumbed 10% to a three-month low.
| Crop prices as of 16:30 GMT Chicago wheat: $5.86 a bushel, -8.6% Chicago corn: $6.23 ½ a bushel, -10.7% Chicago soy: 13.15 ½ a bushel, -1.4% London wheat: £156.75 a tonne, -7.0% Paris wheat: E185.00 a tonne, -7.4% Prices for July contracts on US exchanges, and November contracts in Europe |
In Europe, wheat fell 7% in Paris to E186.00 a tonne for November delivery, the contract's lowest for eight months, London's November wheat contract plunged 7% to a three-month low of £156.50 a tonne.
"The report leaves wheat with a stronger bearish tone despite the technically oversold nature of the current market - and we have yet to see harvest take full root across Europe," Jaime Nolan at FCStone's Dublin office said.
Corn vs soybeans
US Department of Agriculture statisticians, following a farmer survey, pegged corn area at 92.3m acres - 1.6m acres more than they estimated the figure earlier this month, after a wet spring left the pace of plantings well behind normal rates, and was feared to have forced mass abandonment of land.
| Key corn and soybean data, diff. from forecasts and (previous year) Corn stocks, June 1: 3.67bn bushels, +368m bushels, (4.31bn bushels) Corn sowings: 92.282m acres, +1.52m acres, (88.192m acres) Soybean stocks, June 1: 619m bushels, +23m bushels, (571m bushels) Soybean sowings: 75.208m acres, -1.32m acres, (77.404m acres) |
Many of the extra acres appear to have come at the expense of soybeans, for which sowings were seen at 75.2m acres, well below the previous USDA estimate and market forecasts, despite North Dakota farmers achieving record plantings.
Nonetheless, with stocks of the oilseed as of June 1 coming in ahead of forecasts, this cut in sowings was seen unlikely to support prices on Thursday.
Durum hit
Similarly for wheat, sowings fell short of expectations, largely thanks to a 34% slide in seeding of durum, the variety used in making pasta, whose prospects suffered particularly from wet weather in northern states.
| Key wheat data, difference from forecasts, and (previous year) All wheat stocks, June 1: 861m bushels, +35m bushels, (973m bushels) All wheat sowings: 56.433m acres, -238,000 acres, (53.603m acres) Includes other spring wheat: 13.627m acres, +278,000 acres, (13.698m acres) And durum sowings: 1.698m acres, -336,000 acres, (2.57m acres) |
However, wheat inventories were, at 861m bushels, estimated some 35m bushels (1.0m tonnes) above market estimates.
No comments:
Post a Comment