Sept. 30 (Bloomberg) -- Corn futures plunged to a three- year low after the U.S. Department of Agriculture boosted its inventory estimate by 25 percent. Soybeans dropped to the cheapest in five weeks as supplies topped analyst estimates by 11 percent.
Stockpiles of corn on Sept. 1 were 824 million bushels, the USDA said today in a report. That compared with the agency’s estimate of 661 million on Sept. 12. Analysts in a Bloomberg News survey last week expected 694 million, on average. Soybean inventories were 141 million bushels, and a gauge of demand tumbled 41 percent in the three months ended Aug. 31 from a year earlier.
Corn has tumbled 36 percent in 2013, the biggest drop among 24 raw materials in the Standard & Poor’s GSCI Spot Index, amid forecasts for a record crop. Demand for the U.S. grain fell the most since 1975 in the past year. The nation is the world’s top grower.
"The market is going to be dealing with big corn supplies for the next year, and that’s going to limit rallies," Dale Durchholz, the senior market analyst at AgriVisor LLC in Bloomington, Illinois, said in a telephone interview.
Corn futures dropped 2 percent to $4.45 a bushel at 1:09 p.m. on the Chicago Board of Trade. Earlier, the price touched $4.4225, the lowest for a most-active contract since Sept. 1, 2010. Trading was 39 percent above the average in the past 100 days for this time, according to data compiled by Bloomberg.
On Sept. 12, the USDA estimated soybean inventories at 125 million. Last week, 28 analysts surveyed by Bloomberg News projected 127 million, on average. The U.S. is the top producer.
"Supplies are a little bigger than people expected," Randy Mittelstaedt, the director of research at R.J. O’Brien & Associates in Chicago, said in a telephone interview. "Without a bullish surprise, the market is under pressure with the harvest coming very quickly. Yields collected so far have been better than expected, and now we’ll wait to see what happens to the crops that were planted late because of the flooding."
Soybean futures for November delivery fell 2.3 percent to $12.8925 a bushel. Earlier, the oilseed touched $12.84, the lowest since Aug. 22.
Trading was 43 percent above the average in the past 100 days for this time, according to data compiled by Bloomberg. Through Sept. 27, the oilseed dropped 6.4 percent this year.
The USDA earlier this month predicted a record corn harvest of 13.843 billion bushels, 28 percent above last year, signaling lower costs for livestock feed. The agency will update its projections for crops on Oct. 11.