GRAINS-Corn falls most in a month as USDA forecasts record output

Thu Jun 13, 2013 1:45am IST

* USDA estimates 2013/14 corn crop at record 14 billion
bushels
    * U.S. winter wheat production lifted on better yields
    * Wheat futures plunge 2 percent, soybeans narrowly lower

 (Updates U.S. market activity to close)
    By Michael Hirtzer
    CHICAGO, June 12 (Reuters) - U.S. corn futures fell 2.5
percent for their largest decline in a month on Wednesday as the
market was caught off guard when the government cut its
production estimates less sharply than expected.
    The U.S. Department of Agriculture's monthly supply and
demand report said farmers will harvest 14.0 billion bushels of
corn. This would top the previous record by nearly a billion
bushels and replenish global stockpiles diminished after last
summer's drought. 
    The USDA reduced the estimate for corn production by less
than 1 percent, while analysts polled by Reuters were expecting
a cut of more than 2 percent.
    The government decreased corn yield estimates, but left
acreage unchanged and also lifted estimates for the U.S. winter
wheat harvest, triggering selling that sent futures lower at the
Chicago Board of Trade.
    "The trade was trying to dial in a lot bigger overall
production drop on corn than we actually ended up with. That is
the highlight of the (negativity)," said Don Roose, an analyst
at U.S. Commodities.
    "World ending stocks went down mildly on corn and beans, but
they were still very adequate for this year and next."
    CBOT December new-crop corn futures fell 13-1/4 cents
to $5.37-1/2 per bushel while July corn settled 8-3/4
lower cents at $6.50-3/4.
    CBOT July wheat declined 13-3/4 cents, or 2 percent,
to $6.83 per bushel, the lowest closing since May 21. Wheat
deepened losses following the release of the crop report after
coming under pressure early in the session from larger
Australian production.
    Australia is expected to raise wheat production 15 percent
this year to its fourth-largest crop on record, creating greater
competition to U.S. supplies in global markets. 
    The USDA estimated the soybean crop would also set a record
at 3.39 billion bushels, slightly larger than the 2009 level.   
    "If you take the USDA report at face value, we're going to
have a 77-year high on corn planting. I don't think a lot of
people think that's going to be the true number, but there is
just enough there to weigh on the market," said Brian Basting,
an analyst at Advance Trading.
    The USDA left ending stocks of U.S. soybeans unchanged, with
the razor-thin stockpile supporting futures.
    CBOT July soybeans finished 1/4 cent lower at $15.40-3/4 per
bushel after earlier rising as high as $15.58-3/4 - the highest
level since early November. New-crop soybeans fell 12-3/4
cents to $13.14-1/4, pressured by expectations for a big U.S.
harvest.
    Rains this spring replenished soils with moisture that ran
short during last summer's drought, reducing corn and soy
yields. Near-ideal growing conditions weighed on new-crop corn
futures even as old-crop contracts held recent gains.
    "There will be frequent storms for the next week to 10 days,
bringing pretty much excellent conditions for crop development,
but it will slow late plantings," said Andy Karst, a
meteorologist for World Weather Inc. 
        
 Prices at 2:39 p.m. CDT (1939 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  650.75    -8.75  -1.3%   -6.8%
 CBOT soy                  1540.75     0.25   0.0%    8.6%
 CBOT meal                  461.40    -2.90  -0.6%    9.7%
 CBOT soyoil                 48.11     0.07   0.2%   -2.1%
 CBOT wheat                 683.00   -13.75  -2.0%  -12.2%
 CBOT rice                 1628.50    14.50   0.9%    9.6%
 EU wheat                   197.50    -4.25  -2.1%  -21.1%
 
 US crude                    95.88     0.50   0.5%    4.4%
 Dow Jones                  15,004     -118  -0.8%   14.5%
 Gold                      1387.65     8.66   0.6%  -17.1%
 Euro/dollar                1.3333   0.0017   0.1%    1.1%
 Dollar Index              80.9470  -0.1660  -0.2%    1.5%
 Baltic Freight                847       22   2.7%   21.2%
    

 (Additional reporting by Karl Plume and Sam Nelson in Chicago,
Michael Hogan in Hamburg and Colin Packham in Sydney; Editing by
Maureen Bavdek, David Gregorio and Andre Grenon)
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