US Agricultural Production Record Pushes Prices Down

Corn and soybean futures fell as concerns eased that frost will damage plants in parts of the U.S., the world’s top grower of the crops. Wheat dropped to a five-week low.

The odds for a damaging freeze in northern Plains states and the upper Midwest have declined, Bethesda, Maryland-based Commodity Weather Group said today in a report. Last week, corn and soybean prices fell to four-year lows on the outlook for record-high crops this year.

“There was a concern of how low the temperatures might go in places like North Dakota, Minnesota and on into Wisconsin,” Bill Lapp, the president of Advanced Economic Solutions in Omaha, Nebraska, said in a telephone interview. “Instead of impacting 500 million to 1 billion bushels, it could have some impact on a smaller amount. It’s a much narrower area.”

Corn futures for December delivery fell 1.8 percent to $3.495 a bushel at 10:27 a.m. on the Chicago Board of Trade. On Sept. 5, the price jumped the most in six months because of freeze concerns. The grain on Sept. 4 touched $3.4375, the lowest for a most-active contract since June 30, 2010.

U.S. production this year will increase to a record 14.276 billion bushels, topping the government’s August estimate of 14.032 billion, a Bloomberg News survey of analysts showed. The Department of Agriculture is set to update its forecast on Sept. 11.

Soybean futures for November delivery declined 1 percent to $10.1125 a bushel. On Sept. 5, the price climbed the most in four weeks. The oilseed on Sept. 4 touched $10.0125, the lowest since Sept. 2, 2010.

via Bloomberg

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