Front corn futures down 1.85% at $5.96.
From the Des Moines Register's Green Fields blog:
USDA predicts record corn yields, prices between $4.20 and $5
The U.S. Department of Agriculture Thursday said that the corn surplus in the U.S. would double to almost 1.9 billion bushels after the 2012 corn crop is harvested, dropping corn prices to as low as $4.20 per bushel, a figure $2 per bushel below the average price for corn in 2011.From Ag.com:
The reaction by traders was negative, but not panicked, as the December contract for corn opened down 9 cents per bushel to $5.07 on the Chicago Board of Trade.
The December contract traded as high as $6.60 late last year on worries about dry conditions in Iowa, but has fallen as rains eased drought concerns and worries have arisen since about the return of big surpluses.
The USDA report issued before the market opened said “season-average farm (corn) price is projected at $4.20 to $5.00 per bushel, down sharply from the 2011/12 record projected at $5.95 to $6.25 per bushel.”
Such a figure, applied to expected Iowa production of 2.5 billion bushels or better, would shave up to $5 billion in cash from expected sales of the new crop now being planted. However, the figure is not likely to be that large because many farmers have already presold some of this year’s crop on the futures board at higher prices, or invested in hedging their production....MORE
Full USDA Report summary
...MUCH MOREThe USDA May Supply/Demand and World Production Reports highlight that the U.S. feed grain supplies for 2012/13 are projected at a record 416.3 million tons, up 16 percent from 2011/12 with higher area and production for corn, sorghum, barley, and oats.CORN PRODUCTIONCorn production for 2012/13 is projected at a record 14.8 billion bushels, up 2.4 billion from 2011/12. A projected 5.1-million acre increase in harvested area and higher expected yields, compared with 2011/12, sharply boost production prospects. The 2012/13 corn yield is projected at a record 166.0 bushels per acre, 2.0 bushels above the 1990-2010 trend reflecting the rapid pace of planting and emergence. Despite the lowest expected carryin in 16 years, corn supplies for 2012/13 are projected at a record 15.7 billion bushels, up 2.2 billion from 2011/12.