Corn prices tumbled after the US estimated world supplies of the grain far bigger than investors had expected, both this season and in 2014-15, but a forecast of record soybean stocks failed to sink futures in the oilseed.
Corn for July dropped 2.1% at one stage, with the new crop December contract tumbling nearly 3%, after the US Department of Agriculture, in its monthly Wasde report, hiked its forecast for global corn inventories at the close of this season, and forecast a further rise ahead to a 15-year high.
The estimate for world corn stocks at the close of 2013-14 was lifted by 10.4m tonnes to 168.4m tonnes, reflecting a higher expectation for Brazil's harvest, and smaller upgrades to production in the likes of Egypt and South East Asia, besides revisions to earlier-seasons' results too.
The increases more than offset a 4.7m-tonne (185m-bushel) downgrade, to 29.1m tonnes (1.15bn bushels) , in the estimate for US corn inventories at the close of 2013-14, on upgraded export hopes.
And the USDA, in its first forecasts for next season, projected a further rise in world corn inventories, to 181.7m tonnes, the highest this century, reflecting ideas of a record US harvest leading the world to production of 979.1m tonnes – an all-time high too, by a narrow margin.
USDA world corn forecasts, change on previous estimate, and (on market expectation)
Corn stocks, end 2013-14: 168.42m tonnes, +10.4m tonnes, (+11.m tonnes)
Corn stocks, end 2014-15: 181.73m tonnes, n/a, (+22.32m tonnes)
The forecast assumes a 15% drop to Ukraine corn yields, and a 19% drop in output, as the hardships caused by the country's crisis prompt farmers to hold back on inputs.
"Prices for mineral fertilizer and imported agricultural chemicals, including herbicides, insecticides, and pesticides, have increased due to a significant drop in the value of the hryvnia," the USDA said, in comments which followed results from Astarta Holding illustrating the impact on farming companies of the currency's 50% depreciation this year.
However, the USDA forecast a further rise in Chinese corn production, to a record 220.0m tonnes, a result which will limit the country's need for imports - a sensitive market topic given the huge potential for trade – to 3.0m tonnes.
And it saw Mexican output hitting a six-year high of 22.5m tonnes, Argentina's crop reaching 26.0m tonnes, the second biggest on record, while Russia's harvest will come in at a record 12.5m tonnes.
The USDA also forecast a small rise in domestic production, to a record 354.0m tonnes.
The world is on course for a ramp up in soybean supplies too, with global inventories expected to end 2014-15 at a record 82.3m tonnes, the USDA said in its first forecasts for the season.
USDA world soybean forecasts, change on previous estimate, and (on market expectation)
Stocks, end 2013-14: 66.98m tonnes, -2.44m tonnes, (-2.79m tonnes)
Stocks, end 2014-15: 82.23m tonnes, n/a, (+1.89m tonnes)
"The conversion of pasture land to soybean area continues, but higher purchase and rental prices for land combined with expected lower soybean prices, will limit expansion," the USDA said.
Furthermore, Brazilian crop production costs "have steadily increased with additional pest pressures such as Asiatic rust and Helicoverpa corn earworm".
However, the world inventory forecast was a, relatively low, 1.9m tonnes above market expectations.
And the estimate for stocks at the close of this season was cut by 2.5m tonnes – contrasting with an upgrade expected by investors - and reflecting lower expectations for stocks in the US, Brazil and third-ranked producer Argentina.
Soybean futures for July stood 1.2% higher at $14.87 a bushel in late deals in Chicago, when the new crop November contract was 0.2% higher at $12.26 ½ a bushel.
Corn futures for July stood down 1.5% at $5.08 ¾ a bushel, with the new crop December lot down 2.3% at $5.00 a bushel.