Oct. 28 (Bloomberg) -- Corn futures fell to the lowest in more than three years as dry weather improved harvest prospects for a U.S. crop that the government estimates will be the world’s biggest ever.
Farmers probably have completed 50 percent of the harvest as of yesterday, up from 39 percent a week earlier, according Prime Agricultural Consultants Inc. The U.S. Department of Agriculture will issue its update on crop conditions later today. The agency has forecast that output will increase 28 percent this season from last year, when drought damaged fields across the Midwest.
Prices in Chicago have plunged 49 percent from last year’s record. Global supplies have surged on gains in Brazil, Argentina and Urkraine, while the U.S. crop rebounded from the 2012 drought, the most-severe since the 1930s. Cheaper corn is boosting profit for Archer-Daniels-Midland Co., which makes ethanol from the grain, and Sanderson Farms Inc., the third- largest U.S. poultry producer.
“Farmers are generally very happy with the yields this year, and some are selling a few more bushels,” Chad Henderson, the president of Prime Agricultural Consultants in Brookfield, Wisconsin, said in a telephone interview.
Corn futures for December delivery fell 2.1 percent to close at $4.3075 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop since Sept. 30. Earlier, the price touched $4.3025, the lowest for a most-active contract since Aug. 26, 2010. Trading was 51 percent above the 100-day average for this time, according to data compiled by Bloomberg.
This year, corn has tumbled 38 percent, heading for a record decline. The slump was the most among the 24 raw materials in the Standard & Poor’s GSCI Spot Index.
The U.S. harvest accelerated in the past three days amid dry conditions, while widespread rains of as much as 2 inches (5.1 centimeters) beginning late tomorrow may slow fieldwork, Henderson said.
U.S. corn reserves on Aug. 31 will total 1.855 billion bushels, up from 1.837 billion forecast in August, the USDA said on Sept. 12. Global inventories will jump 24 percent to a 12- year high.
“Big production is coming at us, and we are going to build global inventories,” Bryce Stremming, a commodity risk consultant at Mid-Co Commodities Inc. in Bloomington, Illinois, said in a telephone interview.
In the U.S., corn is the biggest crop, followed by soybeans, hay and wheat, government data show.
--Editors: Patrick McKiernan, Millie Munshi