Corn futures drop 6% on larger supply in latest speculative collapse in commodities markets
Farmer Dan Roberts holds corn on the cob during harvest in Minooka, Illinois.
Jim Young | Reuters
Corn futures fell on Tuesday as concerns over the abundance of supply weighed on America’s largest reporting crop. This is the latest volatility to trade in the commodities sector as the pandemic and economic reopening has distorted markets and led to great speculation in areas like timber.
Corn futures for July delivery fell 6% to $ 6.18 a bushel, a month’s low.
Corn came under pressure a day after the US Department of Agriculture said in a report on the progress of crops that American farmers had seeded 90% of the expected corn area on Sunday, ahead of the five-year average of 80%.
Above-rate plantings, the result of sufficient rains in the US Midwest, appeared to counter concerns over continued Chinese demand for corn.
Maize, like other agricultural commodities, has seen its price climb over the past 12 months as companies strive to prevent future inflation and replenish inventories as economies return to normal activity after the Covid-19 pandemic.
Including Tuesday’s pullback, corn futures are up 28% in 2021 and 95% in the last year.
Corn is a crucial component in many supermarket items, ranging from tortilla chips to bourbon. About 40% of the American crop is blended with fuel.
China has bought large quantities of corn in recent months to fatten pigs to replace those it killed in an African swine fever outbreak before the coronavirus pandemic.
July soybeans fell about 10 cents to $ 15.13 a bushel while wheat fell about 5 cents to $ 6.57 a bushel.
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