The price of US corn fell to its lowest level in three and a half years on Friday, torpedoed by two reports from the Department of Agriculture (USDA) which reported larger-than-expected cultivated areas and stocks.
Corn crisis in the United States. The benchmark contract on the Chicago futures market, expiring in July, fell to $3.9050 per bushel (about 25 kg), falling by almost 6%, before recovering slightly. The drop occurred immediately after the USDA published figures that some 37 million hectares should be devoted to corn during the current campaign.
This is 1.6% more than the first projections presented at the end of March by the ministry, a significant difference for this market. If these estimates were confirmed, the area dedicated to yellow grain would nevertheless remain lower (-3.3%) than last year. A good part of the land reallocated was to soybeans (+3%).
Separately, the USDA estimates corn stocks at 126.8 million tons as of June 1, up nearly 22% from the same time last year.
“The numbers were higher than what traders expected,” said Dewey Strickler of Ag Watch Market Advisors, “so it shook up the market. That’s why prices plunged.”
Wind of speculation
These reports have further accentuated the pressure that has been exerted on corn prices for several weeks. The global harvest which promises to be abundant and the relatively mild weather conditions have caused a wind of speculation to blow in this market, with funds betting on the decline.
In the case of wheat, the USDA estimates that 19.1 million hectares of land will be planted this year to the queen cereal. This is 0.5% less than the ministry’s first estimate, but also below what the market was anticipating.
However, wheat prices also fell, particularly because stocks were up 23% compared to 2023, according to Dewey Strickler. For the 2023/24 campaign, which ended at the end of May, US wheat exports were down 5.5% compared to the previous season. The United States suffered, in particular, from Russia’s aggressive tariffs.
