Corn prices slump after gov’t inventory report surprises traders; wheat, soybeans also fall

Corn prices slump on surprise inventory total

Corn prices slumped Thursday after a new government report said inventories were higher than expected, which caught traders by surprise.

Corn prices lost 9.75 cents to settle at $4.9575 a bushel. The movement also dragged down wheat but soybeans rose on higher export sales.

The Agriculture Department said corn stocks totaled 1.71 billion bushels as of Sept. 1 on farms, and at mills, warehouses, elevators and similar places. Most analysts had predicted the stocks would be about 1.407 billion bushels, PFGBest grains analyst Tim Hannagan said.

The report caught many traders off-guard because it means more inventory than they had expected was on hand as the harvest was just beginning at the start of September, Hannagan said.

Corn prices have rallied to two-year highs in recent weeks because of strong export demand and expectations that the U.S. crop will fall short of a record year for yields.

Wheat for December delivery fell 9.5 cents to settle at $6.74 a bushel and November soybeans added 7.75 cents to $11.0675 a bushel as the agricultural agency reported strong net export sales in the past week.

In other trading, most energy prices rose on upbeat economic news that bolstered expectations for improving demand.

The government said first-time claims for jobless benefits declined last week. It also raised its second-quarter estimate on gross domestic product to 1.7 percent from 1.6 percent. In addition, an improvement was recorded in Chicago regional manufacturing activity.

Benchmark oil for November delivery gained $2.11 to settle at $79.97 a barrel on the New York Mercantile Exchange.

In other Nymex trading in October contracts, heating oil rose 5.35 cents to settle at $2.2440 a gallon and gasoline added 4.93 cents to $2.0448 a gallon.

November natural gas lost 9 cents to settle at $3.872 per 1,000 cubic feet after the government said stockpiles rose.

Gold and other metals fell as the dollar grew stronger. Since commodities are priced in dollars, a stronger dollar makes them more expensive for foreign buyers.

In December contracts, gold for December delivery dipped 70 cents to settle at $1,309.60 an ounce; silver fell 13.1 cents to $21.821 an ounce and copper lost 1 cent to $3.6515 a pound.

October palladium added $3.95 to settle at $571.25 an ounce and October platinum gained $2.60 to $1,652.00 a pound.