WASHINGTON: Corn plunged by the most in three years after the US Department of Agriculture (Usda) raised its outlook for yield and production of the top American crop, when most analysts expected a cut.
The agency estimated corn output at about 16 billion bushels, up 1% from last month.
Analysts surveyed by Bloomberg, on average, predicted production of 15.73 billion.
Many believed the agency would lower its outlook after searing summer heat and erratic rains created variable field conditions.
Instead, in what was the second corn-supply shock in the last two weeks, the agency hiked estimates with its findings based in part on the Usda’s random crop counts, known as objective yield analysis.
With the corn harvest still only about a quarter complete, the estimates are subject to change.
But that leaves traders with more supplies to grapple with when potential purchases by China were also awaited.
“The numbers couldn’t get much worse for the corn,” said Charlie Sernatinger, global head of grain at Marex Group Ltd.
Futures dropped as much as 6% to US$4.7025 a bushel, the lowest level since Aug 11, before paring losses. — Bloomberg
