Corn, wheat plunge on bigger supplies

CHICAGO: Corn and wheat prices plunged the most in three months, while soybeans slid, after an increase in stockpile forecasts by the US government eased concern that shortages will inflate prices for food and biofuels.

Inventories of corn in the US, top grower and exporter, may total 846 million bushels before this year’s harvest, 12% more than analysts expected, a US Department of Agriculture report showed on Friday.

The 2011 crop totaled 12.358 billion, above a December forecast, while global output will be a record for a fifth straight year.

World wheat reserves will rise to the highest since 2000, the USDA said. The prospect of ample supplies of grain for livestock feed boosted shares of Tyson Foods, the largest US meat producer, and Smithfield Foods, the top pork processor.

World food prices fell in December for the fifth time in six months and are down 11% from a record in February, the United Nations Food and Agriculture Organization said on Friday. “High prices curbed demand, and now the market will decline until we find improved consumption,” Mark Schultz, the chief analyst for Northstar Commodity Investment in Minneapolis, said in a telephone interview.

Corn futures for March delivery tumbled the 40-cent limit, or 6.1%, to settle at $6.115 a bushel at 1:15 pm on the Chicago Board of Trade.

That’s the biggest drop since September 30. Soybean futures for March delivery fell 1.7% to $11.825 a bushel on the CBOT, after touching $11.50, the lowest since December 21. Before Friday, corn futures were up 13% since mid-December.