Chicago | Reuters — Chicago Board of Trade corn futures hit a six-week low on Thursday as the U.S. government projected farmers will plant more acres this year and prices will decline, analysts said.
The U.S. Department of Agriculture, at its annual Agricultural Outlook Forum, pegged 2023 corn plantings at 91 million acres, up from 88.6 million last year, and production at 15.085 billion bushels, based on a record-high yield of 181.5 bushels per acre.
Analysts were expecting plantings of 90.9 million acres and production of 14.949 billion bushels.
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“The corn market got thumped from the get-go when the Ag Outlook Forum released their production, yield and ending stocks estimates,” commodities brokerage CHS Hedging said.
Although high by historical standards, USDA also projected lower average prices for corn, soybeans and wheat compared with the previous year.
Chicago Board of Trade corn settled down 15 cents at $6.59-1/4 per bushel and hit its lowest price since Jan. 12 at $6.57-1/2 (all figures US$).
Soybeans slid 7-1/2 cents to end at $15.27-1/4 per bushel. Wheat closed a 1/2 cent higher at $7.50-1/2 per bushel, after dropping on Wednesday to its lowest since Feb. 7 at $7.46-3/4.
USDA projected total U.S. wheat production at 1.887 billion bushels, with an average yield of 49.2 bushels per acre, up six per cent from last year’s drought-affected average of 46.5 bushels.
USDA’s projections “give an indication that we have the potential for big crops and the potential for ending stocks to increase,” said Karl Setzer, brokerage research lead at Mid-Co Commodities.
Competition for grain and soybean export business added pressure on futures prices, and there was a lack of bullish news to counteract concerns about demand, brokers said.
USDA is slated to issue weekly U.S. grain and soybean export sales data on Friday.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporitng by Gus Trompiz in Paris and Naveen Thukral in Singapore.
