Corn plunges as USDA pegs US stocks, plantings above expectations

CHICAGO: US corn futures tumbled more than 4 percent on Friday, the market's steepest drop in nearly three years, after the US Department of Agriculture (USDA) estimated US stocks and projected spring plantings above nearly all trade estimates.

Soybeans and wheat followed corn lower despite the USDA's lower-than-expected soy and spring wheat acreage projections and the agency's forecast for the smallest area planted to all types of wheat on record.

Although heavy flooding in key farm states, including major producers Iowa and Nebraska, is likely to shift farmers' plantings over the coming weeks, the USDA's outlook served as a stark reminder of oversupplied grain markets.

"It's impressive, in a matter of seconds, what a stocks and planted area report can do to take out three weeks of a bull market in corn," said Terry Reilly, senior commodities analyst with Futures International.

"Over the next three months, I wouldn't be surprised if we see a bear market in all three of these commodities unless a weather problem develops," he said.

In its quarterly stocks report, the USDA pegged domestic corn supplies as of March 1 at third biggest on record, wheat stocks were the second largest in 31 years and soybean stocks were the largest ever.

The government said US farmers planned to plant 92.792 million acres of corn and 84.617 million acres of soybeans this spring. Its next acreage forecast is expected at the end of June.

Chicago Board of Trade May corn futures fell 17 cents to a contract low of $3.57 a bushel by 12:49 p.m. CDT (1749 GMT). The 4.1 percent drop was the steepest for a most-active corn contract since July 2016.

July corn also posted a contract low and the new-crop December contract came within 6 cents of its contract low.

May soybeans were 3-1/4 cents lower at $8.86-1/4 a bushel after earlier notching a fresh four-month low.

Soybeans drew some underlying support from optimism that US-China trade talks were progressing and after Chinese importers booked their second large US soy purchase this month.

CBOT May wheat was down 6-1/4 cents at $4.58-1/4 a bushel.

Corn and wheat were on pace for their first weekly declines in three weeks, while soybeans were set for a second straight weekly drop.