Corn prices plunged Thursday after the government reported that U.S. farmers have planted the second-largest crop in nearly 70 years.
News of the huge crop took investors by surprise. Many had been expecting the wet weather this spring to keep the annual corn crop small. The only crop that was bigger in the past 67 years was planted in 2007.
Corn for December delivery fell 30 cents, or 4.6 percent, to settle at $6.205 a bushel. It was the largest one-day move allowed by futures exchanges.
This year's planted corn crop is 9 percent larger than the average over the past 10 years. Farmers were highly motivated to plant corn over other crops like soybeans after the price of corn hit a record of $7.99 a bushel this year. But John Sanow, an analyst with Telvent DTN in Omaha, Neb., said it is still far from certain that the corn crop that is actually harvested this year will be as large as the market seems to be expecting. A return of severely wet weather or drought could still reduce how much can be harvested and sold.
Expectations that corn supplies would remain tight were a major factor behind a big increase in corn prices over the past year. Even after Thursday's slump corn is still up 66 percent over the past 12 months.
News of the huge crop took investors by surprise. Many had been expecting the wet weather this spring to keep the annual corn crop small. The only crop that was bigger in the past 67 years was planted in 2007.
Corn for December delivery fell 30 cents, or 4.6 percent, to settle at $6.205 a bushel. It was the largest one-day move allowed by futures exchanges.
This year's planted corn crop is 9 percent larger than the average over the past 10 years. Farmers were highly motivated to plant corn over other crops like soybeans after the price of corn hit a record of $7.99 a bushel this year. But John Sanow, an analyst with Telvent DTN in Omaha, Neb., said it is still far from certain that the corn crop that is actually harvested this year will be as large as the market seems to be expecting. A return of severely wet weather or drought could still reduce how much can be harvested and sold.
Expectations that corn supplies would remain tight were a major factor behind a big increase in corn prices over the past year. Even after Thursday's slump corn is still up 66 percent over the past 12 months.
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