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Corn declined to a five year low with a government report showing that US inventories before this season’s harvest were larger than initially expected.
Futures for the crop with a delivery date in December fell by as much 0.6% to a price per bushel of $3.1875, the lowest value among most active contracts since September 2009. Corn was trading at $3.19 late morning Singapore time on the Chicago Board of Trade after falling for the fifth consecutive month in September and losing 25% last quarter.
Prices for corn have declined by 24% so far this year behind outlook that production levels in the US will reach record high levels. The US Department of Agriculture said yesterday that stockpiles in the country on September 1st were at 1.236 billion bushels . It earlier estimated on September 11th that supply levels were at 1.181 billion bushels, while analysts surveyed by Bloomberg News predicted 1.191 billion. The USDA projects that domestic production will reach 14.395 billion bushels this year to achieve a new record high.
The Australia & New Zealand Banking Group Ltd said earlier today that, “Domestic stockpiles were much higher than expected.”
Goldman Sachs Group Inc. claims that further pressure could still be applied on prices due to greater corn yields and inventories. It forecasts prices to be at $3 per bushel, a level not seen since October 2006, in three and six months.
Soybeans with a delivery date in November fell 0.5% for a price per bushel of $9.085 after sliding to its lowest on September 29th at $9.055. Wheat for December dropped 0.7% to $4.745 per bushel.
