Corn Prices Drop Drastically After High Yield Projections
Corn is a huge crop in Latin America, and corn prices fell for a second day on Friday after the U.S. Department of Agriculture raised its outlook for the domestic harvest. Soybeans and wheat also dropped.
U.S. farmers will collect 13.843 billion bushels of corn in 2013, the most ever and up from 13.763 billion estimated last month, government figures showed yesterday. Domestic output will rise 28 percent from last year's drought-reduced harvest, helping send global inventories to a 12-year high. Prices tumbled 34 percent this year.
"Harvest data from private sources support ideas of good corn production this year as yields have generally come in at or above farmer and trade expectations," Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mailed report. "World data showed that there will be plenty of corn available."
Corn futures for December delivery dropped 1.6 percent to close at $4.59 a bushel at 1:15 p.m. on the Chicago Board of Trade, after falling 1.3 percent yesterday. Prices declined for a second straight week.
Soybean futures for delivery in November fell 1 percent to $13.815 a bushel on the CBOT. The loss pared this week's gain to 1 percent, the sixth straight and the longest advance since June 2009.
Areas of the Midwest, including the top U.S. growers Iowa and Illinois, may get as much as 1.7 inches (4.3 centimeters) of rain the next seven days, aiding the filling of soybean pods with bigger beans, National Weather Service data show.
Oilseed Outlook
Global production of oilseeds including soybeans, canola and sunflower seeds this year is expected to rise 4.8 percent to 495.1 million metric tons from 472.6 a year earlier, boosting global inventories 17 percent before next year's harvest, the USDA said yesterday.
"The Midwest rains should halt the decline in U.S. soybean production and may add a few bushels in some fields," Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. "The world supply of oilseeds is going to be huge."
Wheat futures for December delivery fell 1.8 percent to $6.415 a bushel, capping a second weekly decline.The USDA raised its estimate for global production 0.5 percent from last month to a record 708.89 million metric tons.
Corn, also called maize, is a large grain plant domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain the grain, which are seeds called kernels. Maize kernels are used in cooking as a starch. The Olmec and Mayans cultivated it in numerous varieties throughout Mesoamerica, cooked, ground or processed through nixtamalization. Beginning about 2500 BC, the crop spread through much of the Americas
The region developed a trade network based on surplus and varieties of maize crops. After European contact with the Americas in the late 15th and early 16th centuries, explorers and traders carried maize back to Europe and introduced it to other countries. Maize spread to the rest of the world because of its ability to grow in diverse climates. Sugar-rich varieties called sweet corn are usually grown for human consumption, while field corn varieties are used for animal feed and as chemical feedstocks.