Sept. 30 (Bloomberg) -- Corn plunged, heading for a record monthly decline, after a government report showed larger U.S. inventories than forecast, signaling reduced demand for the grain used in animal feed and ethanol. Soybeans also declined.
Consumption of corn in the U.S., the world’s largest grower and exporter, fell to 2.54 billion bushels in the three months ended Aug. 31 from 2.6 billion a year earlier, the Department of Agriculture said today in a report. Feed use dropped 7.9 percent to 456 million bushels. Prices are down 23 percent since the end of August, heading for the biggest monthly decline on record.
“It’s a big negative surprise,” said Gregg Hunt, a market analyst and broker at Archer Financial Services Inc. in Chicago. “The drop in consumption implies that livestock feeders were using other feed sources, including ethanol by-products, and also says that last year’s crop was larger than the USDA estimated.”
Corn futures for December delivery plunged 36.75 cents, or 5.8 percent, to $5.9575 a bushel at 10:28 a.m. on the Chicago Board of Trade, after dropping as much as the 40-cent exchange limit to $5.925, the lowest since July 1.
Soybean futures for November delivery dropped 39.5 cents, or 3.2 percent, to $11.905 a bushel on the CBOT, after touching $11.7925, the lowest for a most-active contract since Nov. 17.
Corn stockpiles on Sept. 1 totaled 1.128 billion bushels, down from 1.708 billion a year earlier, the USDA said. Analysts in a Bloomberg News survey expected 942 million, on average.
Corn is the largest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government data show.
--Editors: Steve Stroth, Patrick McKiernan
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