Corn prices plunge on higher supply forecastThe price of corn plunged Thursday after the government said corn supplies were higher than traders expected. Investors had bid the price up, expecting tighter supplies because of weather damage to crops.
By: Sandy Shore, Associated Press
The price of corn plunged Thursday after the government said corn supplies were higher than traders expected. Investors had bid the price up, expecting tighter supplies because of weather damage to crops.
Corn for March delivery fell 40 cents, or 6.1 percent, to $6.115 per bushel. The price has fallen 24 percent from June, when concerns about a potential shortage sent the price to a record $7.99.
The Agriculture Department said farmers produced 12.358 billion bushels of corn last year, slightly higher than its estimate a month ago. It predicted supplies will drop 2 million bushels to 846 million bushels by the end of this year's harvest. Analysts said traders had expected that number to be closer to 750 million bushels.
The U.S. Agriculture Department forecast would still leave both domestic and global supplies at fairly tight levels by summer's end.
The global corn supply forecast was little changed at 128.14 million metric tons. The agency said losses in Argentina due to dry weather should be offset by increased production in the United States, parts of Europe and Russia compared with a year ago.
"Everything in this report was bearish — yes, short-term maybe, but long-term, I'm still very bullish," said John Sanow, an analyst with Telvent DTN. "Demand remains very strong."
Wheat and soybean prices also fell, partly because of the drop in the price of corn. March wheat fell 36 cents, or 5.6 percent, to finish at $6.05 per bushel, while soybeans ended down 20.5 cents, or 1.7 percent, at $11.825 per bushel.
Copyright 2012 The Associated Press.