Corn futures fell to the lowest in more than four years after a government report showed inventories will be larger than forecast in the U.S., the world’s top grower.
Domestic reserves of corn on Aug. 31, 2015, before next year’s harvest, will total 2.002 billion bushels, compared with 1.808 billion (45.93 million metric tons) forecast in August, the U.S. Department of Agriculture said today. Analysts surveyed by Bloomberg were expecting 1.995 billion, on average.
U.S. farmers will collect a record 14.395 billion bushels this year, up from 14.032 billion estimated last month, the USDA said after completing its second survey of farmers and fields. The average projection of 32 analysts was 14.276 billion.
Two years after the worst U.S. drought in a century cut output and sent prices to the highest ever, rain and mild weather in the past three months created ideal growing conditions. Bigger supplies are lowering costs for buyers including Tyson Foods Inc., while threatening to reduce farmland values.
Corn futures for December delivery fell 2 percent to $3.3875 a bushel at 11:12 a.m. on the Chicago Board of Trade. Prices earlier touched $3.37, the lowest since June 30, 2010.
Global inventories at the end of the marketing year will be 189.91 million tons, up from 187.82 million predicted in August, the USDA said. Traders expected reserves to reach 189.81 million, on average.
Larger harvests are helping to keep global food inflation in check, with the United Nations reporting today that prices fell to the lowest in almost four years in August.