Corn futures plunged after the US said its farmers planted more of the grain than had been expected, despite a slow start to the spring sowing season, with durum wheat and cotton picking up extra acres too.
Chicago corn futures for December slumped by 3.7% at one point to a three-month low of $6.31 ¾ a bushel, before recouping a little ground to stand at $6.31 ¾ a bushel in late deals, down 3.3% on the day.
The slide followed the release of US Department of Agriculture data showing that domestic growers planted 89.92m acres of corn this year – some 430,000 acres more than they had intended to, as shown by an official survey in March.
The plantings figure, while down by more than 4.3m acres year on year, was also a little above the 89.86m-acre number than investors had expected, according to a Reuters poll.
Corn futures are poised for a loss of some 12% this month, while also on course for a negative quarter for the first time in two years.
The bigger-than-expected area defied concerns among some investors that a slow start to the US slowing season might deter some growers from corn, which has a relatively early planting window compared with rival crops such as cotton and soybeans.
As of mid-May, growers had not, thanks to cold and wet weather in some key Corn Belt states, even reached the half-way mark in terms of corn planting progress, compared with an average of 67% completion by then.
The conditions were reflected in outperformance of corn futures, as the market attempted to win more acres for the grain from rival crops.
In mid-May, the ratio of new crop November soybean futures to December corn futures, unusually, fell below 2.0, compared with levels above 2.4 early this year.
The ratio recovered back to 2.12 by the end of May, as an improvement in conditions allowed an acceleration in corn sowings progress, although the USDA said that 4.0m acres of the grain remained to be planted as of the early-June timing of its latest survey.
Soybeans vs corn, cotton
The extra corn area came in part at the expense of soybeans, of which US growers seeded 88.33m acres, Thursday’s USDA briefing showed, well below the 90.96m acres that they had initialled intended to seed with the oilseed.
The total was also below the 90.45m acre-number that investors had expected the report to show, and investors initial market reaction was to send soybean futures for November up 2.0% to $15.07 ¾ a bushel.
The lot stood at $14.85 ½ a bushel, up 0.4% on the day, an hour after the report was published.
Cotton also picked up extra area, with Thursday’s briefing pegging US sowings this year at 12.48m acres, more than 240,000 acres above the figure farmers had expected in March to seed.
Investors had expected the cotton plantings number actually to dip below March intentions, to 12.19m acres.
Durum wheat plantings, at 1.98m acres, were well above the area that investors had forecast, of 1.84m acres, besides exceeding farmers’ initial expectations too.
However, plantings of other spring wheat, at 11.11m acres, came in below farmers’ March plans of 11.20m acres, if exceeding by nearly 300,000 acres the area that traders had expected Thursday’s briefing to show.
Minneapolis spring wheat futures for September fell by 2.7% to a three-month low of $10.00 ¼ a bushel.