US Corn Plummets to Four-year Low on Inventories, EU Wheat Slides

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The price of corn declined to its lowest since July 2010 in Chicago on prospects for a bumper yield in the US, the world’s number one producer. Soybeans were on course for the biggest drop in a month while wheat advanced.

US Corn Plummets to Four-year Low on Inventories, EU Wheat Slides

US corn output will hike 4.3% to a record 14.518 billion bushels and soybean production will rise 17% this year, a report by the Linn Group showed today. Comprehensive rain next week will ease crop stress after precipitation that was below normal in July exhausted soil moisture storage, World Weather Inc. wrote in a report to clients.

“The rain next week increases the confidence for big crops, especially for soybeans, which are more dependent on August moisture.There’s little urgency for buyers to step up purchases right now,” Jacquie Voeks of West Bend, Wisconsin-based Stewart Peterson Group told Bloomberg.

Corn futures for delivery in December plunged 0.8% to $3.64 per bushel as of 11:27 am on the Chicago Board of Trade after reaching $3.6275, the lowest since July 7, 2011.

Soybeans futures for November settlement dropped 1.9% to $10.6175 per bushel, heading for a second weekly decline in a row. If the future closes at that exchange rate, that will register the biggest daily loss since June 30.

Wheat futures for September settlement added 1% to $5.355 per bushel in Chicago. The price touched $5.44, the highest since July 18.

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But according to Business Recorder, Euronext wheat futures stretched losses on Friday to hit a fresh four-year low on quality concerns in a rain-hit western European yield.

US and European wheat contracts had both declined to four-year lows last month on harvest boost in the northern hemisphere and indicators of stiff shipment competition from the Black Sea region.

“People are buying into good-quality US wheat and selling what is seen as mediocre EU wheat,” a trader is quoted by Business Recorder as saying.

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To contact the reporter of this story; Jonathan Millet at john@forexminute.com