Corn futures dropped 59 cents per bushel to $6.39 for the July contract and 30 cents per bushel to $6.20 for the December at the opening of the Chicago Board of Trade after the U.S. Department of Agriculture surprised the market with a report that the number of acres planted for corn rose 5 percent this spring to 92.3 million acres.
“The report this morning caught the trade by complete surprise,” said broker Tomm Pfitzenmaier of Summit Commodities in Des Moines. “The planted acres were well above the highest of the trade estimates. Apparently the high price of corn did entice farmers to plant many more acres than were expected.”
Don Roose of US Commodities in West Des Moines said “the market sent a signal to farmers to plant fence row to fence row, and they did. Now we’re going to find the true value of corn.”
Arlan Suderman of Farm Futures Magazine said the market was “shocked” by the report.
“USDA shocked the grain trade with mostly bearish data this morning,” Suderman said. “This was a year when everything needed to go right to get the acres planted and very little did go right, outside of Iowa. It is also a year when end users are scrambling trying to find supplies ahead of the approaching harvest. Yet, USDA found the bushels and acres somewhere, with both above trade expectations in most categories.”
The report is expected to cause a sharp drop in corn prices, which have fluctuated wildly most of this year. Corn reached a 2011 high of $7.99 per bushel in early June, then lost $1.50 per bushel as investors became nervous about international market conditions. Corn had regained about 45 cents of its losses in the last two days....MORE