CHICAGO, Feb 25 (Reuters) – Grain prices on American exchanges fell on Thursday, with corn futures leading the slide, as commodity traders reacted to U.S. Department of Agriculture forecasts of increased corn plantings and falling prices in the coming growing season.
In Canada, March canola futures were trading down more than two percent, with the uncertainty about exports to China providing additional downward pressure.
The USDA’s forecasts, released Thursday morning at its annual two-day Outlook Forum, put corn seedings up by up two million acres to 90 million.
But a downward forecast for soybean plantings this year made some investors suspicious: USDA projected soybean plantings would be at 82.5 million acres, down slightly from 82.7 million.
Traders said they were expecting the agency to predict farmers would plant more corn and soybeans this year than last year as they scramble to stay solvent in the face of declining crop prices. The average of trader’s forecast for corn was 89.65 million acres and for soybeans was 83.3 million.
“There are more acres to go around this year,” said Terry Linn, analyst with the Linn Group in Chicago. “There are less wheat acres. Sorghum acres will be down due to Chinese demand drying up. Even cotton acres are going to be down.” Farmers could plant soybeans on that ground, he said.
The vision of an already amply stocked grain supply chain being further stuffed, but with little sign of new demand, also weighed on corn and soybean futures. The progress of the harvest in key South American producers Brazil and Argentina could bolster worldwide stocks even further, said traders.
Overall, the USDA predicted that U.S. farmers will cut plantings of the eight major crops by one percent to 249.1 million acres in 2016, with expectations for weak prices cutting into seedings.
As of 11:25 CST Chicago Board of Trade March corn is down one percent, to $3.568 3/4 a bushel. March soybeans are down 0.5 percent to $8.63 ¼ a bushel.
Chicago March wheat was up slightly at 4.44 ½ .
It had touched its lowest since June 2010 at $4.38 a bushel on Wednesday, pressured by abundant global supplies and weak demand for U.S. wheat.
Export sales of corn and soybeans last week were within the range of trade expectations while wheat sales topped expectations, according to USDA data on Thursday.
But season-to-date sales of all three commodities continued to lag the pace needed to reach USDA’s full-season export outlook.
