Prices for corn and soybeans plunged Monday after a government report raised expectations of bumper crops.
In its annual report, the U.S. Department of Agriculture said that farmers have planted a record high 84.8 million acres of soybeans this year, up 11 percent from last year.
Sterling Smith, a commodities strategist at Citigroup, said the number came in higher than even the highest forecast. Funds that trade commodities dumped their holdings in response, he said.
“This report implies a very large soybean crop,” Smith said. “It took the market down spectacularly.”
Soybeans slumped 71 cents, or 6 percent, to settle at $11.57 a bushel, the lowest price since last August, according to FactSet data. Corn dropped 22 cents, or 5 percent, to settle at $4.25 a bushel, the lowest price since January.
The USDA’s report suggested that corn supplies are rising, too. Stockpiles rose to 3.8 billion bushels, up from 2.7 billion last year and higher than estimates. Seventy-six percent of the corn crop is in good to excellent condition, compared with 63 percent last year, it said.