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Corn falls to three-year low after U.S. forecasts record harvest
Chicago corn futures hovered near three-year lows on Monday as the market priced in last week’s U.S. government forecast that farmers will produce the largest corn crop on record this year.
Soybean prices rose and wheat prices fell.
Rod Baker of the Australian Crop Forecast Center in Perth said the higher U.S. production forecast caught the market off guard.
He said the market was also watching whether dry weather in Brazil would damage the country’s second corn harvest.
“If the drought conditions persist, this will support prices. If conditions improve and they get a second crop, that will be negative,” he said.
The U.S. Department of Agriculture (USDA) last week raised its forecast for the U.S. 2023-24 corn harvest to 15.234 billion bushels from 15.064 billion bushels.
Farmers say a lack of rainfall in Mato Grosso state, Brazil’s largest grain-producing region, has affected the second-season corn harvest.
As of 14:41 Beijing time, the main corn contract Cv1 of the Chicago Board of Trade (CBOT) fell 0.3% to US$4.6275 per bushel. It had previously hit US$4.62, equivalent to last Friday’s low and the lowest since December 2020. price.
CBOT corn prices have fallen about 32% so far in 2023 and are on course for their biggest annual drop in a decade as Brazil’s record harvest pushes the market closer to a surplus.
Brazilian crop agency Conab predicts total corn production in 2023/24 to be about 119 million tons, a 9.6% decrease from the previous season.
Among other crops, wheat Wv1 fell 1% to $5.6975 per bushel, and soybeans Sv1 rose 0.4% to $13.5250 per bushel.
The USDA raised its forecast for U.S. soybean production to 4.129 billion bushels from 4.104 billion bushels.
Like corn, Brazil’s record soybean harvest this year has put pressure on prices. But farmers say low rainfall in Mato Grosso has delayed soybean planting by up to 30 days and forced reseeding in some areas, limiting yield potential.
Despite the bad weather, Conab last week raised its forecast for Brazilian soybean production to 162.42 million tons.
As for wheat, the U.S. Department of Agriculture last week raised its forecast for Russia’s wheat production this year by 5 million tons to about 90 million tons, and expected global ending stocks to be higher than expected.
Traders are monitoring continued rainfall in France, which slowed grain planting further last week and now lags well behind last year.
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