Corn futures fell to a 5-year low Friday as farmers started harvesting the largest-ever crop in the U.S., the world's top grower, reducing costs for livestock producers and grain processors.
Rains and cool Midwest temperatures helped plant growth this year with 74 percent of the crop rated in good or excellent condition as of Sept. 21, the best in two decades, U.S. Department of Agriculture data showed.
Farmers will harvest a record 14.395 billion bushels this season, up 3.4 percent from a year earlier, the USDA estimates.
Cheaper grain is bolstering prospects for companies including Archer-Daniels-Midland Co. and Tyson Foods Inc.
Increasing global supplies helped drive world food prices in August to the lowest in almost fours years, a United Nations gauge showed this month. Corn may extend a slump into the second half of October as the harvest accelerates, Societe Generale said Friday in a report.
"The market is reacting to the prospect of seeing a record crop come in by a wide margin," said Shawn McCambridge, a senior grain analyst at Jeffries in Chicago. "The weather this year has been exactly what we've needed."
Corn futures for December delivery dropped 0.9 percent to close at $3.23 a bushel on the Chicago Board of Trade. Earlier, the price touched $3.2275, the lowest for a most-active contract since Sept. 24, 2009.
Corn has dropped 23 percent in 2014. In 2013, the price tumbled 40 percent. Futures haven't declined for two straight years since 1999.
Soybeans tumbled to a 4-year low, and wheat Thursday touched the lowest since 2010. Cattle and hog futures have rallied to records this year, sending retail beef and pork costs to all-time highs.
In the U.S., 7 percent of the corn crop was harvested as of Sept. 21, and above-normal temperatures and dry weather in the Midwest in the next five days will aid progress, DTN meteorologist Joel Burgio wrote in a note.
"There's just a glut of corn on the market now," said Bryce Knorr, a Chicago-based senior grain market analyst at Farm Futures magazine. "We've got a perfect weekend for harvest."
U.S. stockpiles will soar 70 percent to 2.002 billion bushels compared with a year earlier, according to an Aug. 31 USDA forecast.
Business on 09/27/2014