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Corn Drops to Four-Year Low as Larger Crops Seen from U.S. to EU

July 21, 2014
corn pile

Corn dropped to the lowest in four years as rising production from the U.S. to Europe is expected to boost global supplies, negating concerns that turmoil in Ukraine may disrupt shipments from the Black Sea region.

A lack of heat in the U.S. Midwest in the next two weeks will aid soybean growth and late corn pollination, Commodity Weather Group wrote in a report today. The European Union’s crop-monitoring unit raised its outlook for corn yields today, citing July rains that helped summer-crop conditions.

Corn for December delivery fell 1.5 percent to $3.7275 a bushel on the Chicago Board of Trade by 8:01 a.m. after earlier touching $3.7175, the lowest for a most-active contract since July 14, 2010. Prices are set for a third monthly drop.

"The growing season continues in nearly perfect form here in the U.S. and in much of Canada," economist Dennis Gartman wrote in his newsletter. "This relentless bear market shall not end until the nation’s farmers have sold their crops."

Futures fell 25 percent in the past year on expectations a second straight bumper U.S. crop will lift world supplies. The U.S. Department of Agriculture predicts domestic output will reach 13.86 billion bushels, the second-highest on record.

"For the new harvest, flowering is occuring in excellent conditions across Europe and in the U.S.," Paris-based farm adviser Agritel wrote in a weekly report. "Estimated yields for the Corn Belt are looking very optimistic, making the USDA’s production prospects almost pessimistic at 165 bushels per acre."

The U.S. corn yield is forecast to be 171 bushels per acre, the highest ever, Commodity Weather Group wrote in a July 17 report, citing analysis of crop conditions, vegetative health as well as rainfall and temperature patterns.

Conditions are perfect for yields to be above trend,’’ Paul Deane, an analyst at Australia & New Zealand Banking Group Ltd., said by phone. "Below-average temperatures, good rains, the market is really looking at that now."


Harvest Start


World corn inventories will be 188.05 million metric tons before the start of the 2015 harvest, up from 173.42 million estimated for this year and the highest since 2000, the USDA said on July 11.

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RELATED TOPICS: Corn, Marketing, Global Markets



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