Corn, Wheat Plunge; Soybeans Slip On USDA Data (CORN, MOO, DBA, POT, MON)

Sumit Roy:  Corn hit by a double whammy of higher-than-expected inventories and plantings; other grains fared better.

Two reports from the U.S. Department of Agriculture sent grain prices skidding on Thursday. In its quarterly Grains Stocks report, the USDA said that corn stocks in the second quarter totaled 3.67 billion bushels, well above the 3.32 billion that was expected. Wheat and soybean stocks totaled 0.861 billion bushels and 0.619 billion bushels, respectively, also above expectations, of 0.824 billion and 0.595 billion.

Front-month July corn contracts were last down $0.71/bushel, or more than 10 percent, while longer-dated contracts all fell by the exchange limit of $0.30/bushel. Prices are now testing support near $6/bushel, which corresponds to the lows put in during March.

Wheat prices also careened by more than 8 percent, with prices decisively breaking below support near $6.50/bushel. Wheat is now at the lowest level since July of last year.

Soybeans performed relatively well amid the massacre in the other grains, with prices down only about 2 percent and just above the $13/bushel support level.

Soybeans were likely outperforming thanks to the USDA’s other release of the day, the Acreage report. In it, the department said that soybeans plantings totaled 75.2 million acres, below the analyst consensus of 76.6 million acres.

Wheat plantings totaled 56.4 million acres, also below expectations of 56.7 million. Meanwhile, corn’s underperformance is likely due to the fact that plantings for the grain totaled 92.3 million acres, above the 90.6-million-acre consensus.

Related tickers: Market Vectors Agribusiness ETF (NYSE:MOO), PowerShares DB Agriculture (NYSE:DBA), Teucrium Corn (NYSE:CORN), Potash Corp. of Saskatchewan, Inc. (NYSE:POT), Monsanto Co. (NYSE:MON).

Written by Sumit Roy From Hard Assets Investor (HAI) is a research-oriented Web site devoted to sharing ideas about hard assets investing. The site has been developed as an educational resource for both individual and institutional investors interested in learning more about commodity equities, commodity futures and gold (the three major components of the hard assets marketplace). The site will focus on hard assets investing without endorsing or recommending any particular investment product.

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