Corn futures headed for the biggest decline in a year as the U.S. government said domestic stockpiles will be larger than forecast.
Inventories on June 1 in the U.S., the world’s biggest producer, reached 3.854 billion bushels, after production rose to a record last year, the Department of Agriculture said today. The average estimate of 26 analysts surveyed by Bloomberg was 3.723 billion. Stockpiles a year earlier were 2.766 billion.
Prices fell 17 percent in the 12 months through June 27 on forecasts for increasing supplies. The outlook for bigger crops has helped to keep global food costs in check, with the United Nations saying world food prices fell in May for the second straight month.
"Inventories were larger than expected and signal no shortfall in supplies ahead of the harvest this year," Dale Durchholz, the senior market analyst for AgriVisor LLC in Bloomington, Illinois, said in a telephone interview. "Corn supplies are comfortable."
Corn futures for December delivery fell 4.5 percent to $4.2725 a bushel at 11:39 a.m. on the Chicago Board of Trade, heading for the biggest decline since June 28, 2013.
Global grain stockpiles, excluding rice, are forecast to climb to a 15-year high by the end of the 2014-2015 season, the London-based International Grains Council said on June 26.
Soybeans fell to the lowest since January 2012 as the USDA said farmers will plant more than analysts expected.
Seedings will reach an all-time high of 84.839 million acres. Analysts expected 82.213 million acres, according to a Bloomberg survey. The USDA said in March that growers intended to plant 81.493 million.
"Certainly, we were all fearing for a record number, but this was way out of the range of expectations," Bill Nelson, senior economist at Doane Advisory Services in St. Louis, said in a telephone interview. "We had the wet start to the corn planting season. In the end, that might have encouraged some farmers to switch from earlier intentions into soybeans."
About 91.641 million acres were planted with corn, down from 91.691 million forecast in March, the USDA said, after surveying farmers this month. The average estimate of 26 analysts in a Bloomberg News survey was 91.709 million acres.
On the CBOT, soybean futures for November delivery tumbled 4.8 percent to $11.6875 a bushel, after touching $11.6225, the lowest since Jan. 13, 2012.
Wheat futures for September delivery fell 2.9 percent to $5.765 a bushel in Chicago.