Corn prices plunged Thursday after the government reported that U.S. farmers have planted the second-largest crop in nearly 70 years.
News of the huge crop took investors by surprise. Many had been expecting the wet weather this spring to keep the annual corn crop small. The only crop that was bigger in the past 67 years was planted in 2007.
Corn for December delivery fell 30 cents, or 4.6 percent, to settle at $6.205 a bushel. It was the largest one-day move allowed by futures exchanges.
This year's planted corn crop is 9 percent larger than the average over the past 10 years. Farmers were highly motivated to plant corn over other crops like soybeans after the price of corn hit a record of $7.99 a bushel this year. But John Sanow, an analyst with Telvent DTN in Omaha, Neb., said it is still far from certain that the corn crop that is actually harvested this year will be as large as the market seems to be expecting. A return of severely wet weather or drought could still reduce how much can be harvested and sold.
Expectations that corn supplies would remain tight were a major factor behind a big increase in corn prices over the past year. Even after Thursday's slump corn is still up 66 percent over the past 12 months.
"The real key here is going to be harvest," Sanow said. "It doesn't really matter if it got planted, if it gets flooded."
Wheat futures also fell sharply. Wheat for September delivery fell 60 cents to $6.1425 bushel. November soybeans fell 29 cents to $12.94 a bushel.
In metals trading, gold for August delivery fell $7.60 to settle at $1,502.80 an ounce. September silver rose 6.3 cents to settle at $34.832 an ounce.
September copper rose 5.85 cents to settle at $4.2825 a pound while October platinum fell 50 cents to $1,726.10 an ounce. September palladium rose $8.75 to $750.65 an ounce.
Benchmark crude for August delivery climbed 65 cents to settle at 95.42 per barrel on the New York Mercantile Exchange as lawmakers in Greece approved final details of a plan that will bring sweeping financial reform to its beleaguered economy.
In other Nymex contracts, heating oil rose 1.16 cents to settle at $2.9463 per gallon, gasoline rose 3.43 cents to $2.9692 per gallon and natural gas fell 5.9 cents to $4.393 per 1,000 cubic feet.
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