US corn and soybean prices dropped on Friday after the government predicted harvests higher than the record levels that had been expected previously.
14.54 billion bushels of corn are expected from US farmers, higher than the 14.395 billion bushels forecast last month by US Department of Agriculture.
December delivery corn dropped to $3.4175 per bushel or 0.9% on the Chicago Board of Trade. Prices are expected to jump 5.7% this week, the highest since May 2013’s last week, as reported by Bloomberg.
Senior analyst at DTN, Darin Newsom said, “The USDA report is expected to be bearish for corn, with few chances for a believable bullish surprise. Commodities across the board are starting to feel the weight of the ongoing global sell-off in financial markets.”
President of Allendale Inc, Paul Georgy, said, “Grain futures are lower as crude oil sets new contract lows and the equity markets extend sell-off.”
The Wall Street Journal quoted analyst brokerage Futures International in Chicago Terry Reilly as having said, “The USDA surprised us by not coming within the trade averages and with their downward revision of harvested area. But the fact remains that the markets are seeing residual pressure from ample global supplies.”
There was a slump of 195 in corn futures this year amid expectations that the US output will climb to the highest level.
US farmers harvested 17% by October 5 in comparison with 32% on average in the last five years, as reported in October 6.
November delivery soybeans dropped 0.9% to $9.3325 per bushel, which limited the weekly advance to 2.3%.
December delivery for wheat dropped 0.7% to $4.90 per bushel in Chicago, while November delivery milling wheat traded on traded on Euronext in Paris dropped 1% to $197.17 per metric ton.
The USDA predicted domestic inventories of wheat at the end of the 2014-15 season next May 31 would be a total 654 million bushels, down from the 698 million bushels estimate of September.
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