CHICAGO: Chicago corn futures plunged to a 3-year low on Friday, after the US Department of Agriculture reported that US corn stocks swelled to their highest levels since 2018.

Soybeans also fell sharply, with prices at the lowest seen in 26 months, as traders raced to shed their positions after the government reported larger-than-expected Brazilian crops, as well as bigger US yield and production levels for the recently harvested crop.

World grain supplies are becoming flusher after tightening due to the war in Ukraine, a major corn and wheat producer, and unfavorable crop weather.

In the United States, a record corn harvest in 2023 and lackluster export sales have contributed to growing stocks and pushed seven corn futures contracts to new lows - including most-active March, May and September. Wheat futures also turned lower, weighed down by corn and soybean markets.

“The bottom line is very simple: We’re out-producing our demand right now, and that’s pressuring the entire market,” said Karl Setzer, partner at Consus Ag Consulting.

The most-active corn contract on the Chicago Board of Trade (CBOT) was down 2.62% at $4.45-3/4 a bushel at 1806 GMT. The most-active soybean contract was down 2% to $12.11-3/4 a bushel, while wheat was down 1.16% at $5.96-3/4 a bushel.

Separately, the USDA estimated Brazil’s soybean production at 157 million metric tons, down 3 million tons from last year’s record crop of 160 million tons.

While widespread drought has hurt farms in parts of Brazil, the world’s top soybean exporter, the report pegged the number higher than market expectations.

“Going forward, we’re working with pretty heavy balance sheets not only for corn but now for beans,” said Terry Reilly, senior agricultural strategist at Marex Capital. “That’s going to set the tone for lower 2024 prices relative to 2023.”