Larger corn crop sends prices sharply lower

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(MCT) — Iowa corn farmers, like their national counterparts, have planted more acres of corn than analysts expected.

The U.S. Department of Agriculture on Tuesday said Iowa farmers planted 13.7 million acres of corn through June, up from 13.3 million acres in 2008.

They expect to harvest 13.4 million acres of corn, up from 12.8 million acres harvested after the 2008 flood and delayed planting season.

Iowa soybean farmers planted 9.8 million acres of soybeans, up slightly from 9.75 million acres in 2008. They expect to harvest 9.75 million acres, up from 9.68 million acres in 2008.
Nationally, farmers planted 87 million corn acres, up 1 million acres from last year. The USDA said a record 77.5 million acres of soybeans were planted through June, up 1.8 million acres from last year.

On the Chicago Board of Trade, corn prices took a beating after the report was released.
Corn for September delivery dropped 30 cents — the maximum amount prices are able to fall in a single session — to finish at $3.55 a bushel.

August soybeans shed 2.75 cents to close at $11.19 a bushel. Soybean prices fell sharply early in the session, but recovered later in the day.

The USDA also reported a larger supply of corn reserves on hand than many analysts forecast.

About 4.27 billion bushels of corn are stored on farms and grain bins, up 6 percent from last year and above the 4.18 billion bushes analysts had predicted.

The robust figures were surprising considering the rainy weather this season in the eastern Corn Belt.

Darrell Jobman, senior analyst at TraderPlanet.

com, called the figures “shocking.” “If you’re a corn bull, today was not a particularly great day,” Jobman said.

The larger corn supply should provide a boost for ethanol producers, who are starting to ramp up production and look at reopening plants shut down last year when grain prices skyrocketed and oil prices crashed, according to Brian Basting, commodity research analyst at Advance Trading Inc. in Bloomington, Ill.

“It appears to be a slow healing process” in the ethanol industry, Basting said. “We’re seeing the (profit) margins creep back into positive territory.” Bob Dinneen, president of the Renewable Fuels Association, noted that the second-largest corn crop since 1946 (2007 was larger) will be produced on 4 million fewer acres than last year’s crop.

“Farming efficiencies and new technologies are yielding production gains for agriculture that continue to exceed demand for food, feed and renewable fuel alternatives to petroleum,” Dinneen said.