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Corn Plunges Most in 3 Years After Higher U.S. Crop Estimate Surprises

By Barbara Smith

CHICAGO, Aug 12 (Reuters) - Chicago corn futures fell nearly 6% on Monday, on track for the biggest drop in more than three years, after the U.S. Department of Agriculture forecast a bigger-than-expected harvest.

The USDA forecast the 2019/20 corn crop at 13.901 billion bushels, above the 13.875 billion bushels expected in July. A Reuters poll of analysts had predicted a USDA forecast of 13.193 billion bushels.

The USDA resurveyed farmers following wide criticism of a June report on how many acres of corn would be planted. Its new survey showed farmers had planted 90.0 million acres, well above the 80.05 million acres in the June poll.

“Traders didn’t get to see corn acres cut as much as they wanted so they’re sending futures markets sharply lower,” said Terry Reilly, senior commodity analyst, Futures International. “The crop isn’t as bad as people predicted out there.”

Chicago Board of Trade most-active corn fell to $3.92¾ cents. Five corn futures contracts fell to their daily limit down of 25¢. Soybeans fell 1.63% to $8.77¼ a bushel, while wheat fell 6.21% to $4.68½ a bushel.

“These numbers could not have been worse for the corn, and the corn is the locomotive that pulls the grain train,” said Charlie Sernatinger, analyst with ED&F Man Capital.

Wheat markets are also facing good world supplies and heavy export competition.

Wheat harvesting in Europe is generally progressing well, with work in France almost finished.

USDA lowered its soybean crop estimate to 3.680 billion bushels from 3.845 billion bushels previously.

While rain disrupted corn planting this year, dry weather in recent weeks has caused concern about lack of water hindering crop development.

Some analysts said USDA’s corn numbers were still suspect, particularly the projected yield of 169.5 bushels per acre.

“The corn yield is still a surprise. We’ll see if the market still believes it by closing time,” said Mike Zuzolo, president of Global Commodity Analytics. (Reporting by Barbara Smith; additional reporting by Julie Ingwersen, Tom Polansek and Karl Plume in Chicago and Michael Hogan in Hamburg; writing by Caroline Stauffer; editing by Richard Chang and Steve Orlofsky)

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