CHICAGO - U.S. corn futures dropped more than 5 percent and were headed for their biggest daily loss since May on Thursday as grain prices plunged after a government crop report showed the corn stockpile larger than analysts expected.
The U.S. Agriculture Department in its annual plantings and quarterly stocks reports also said farmers would plant the most corn acres since 1936 and the fourth largest soybean area ever.
Corn stocks were estimated as 5.399 billion bushels, above the average analyst estimate of 5.013 billion bushels. Soybean stocks were pegged at 999 million bushels, above trade guesses of 935 million bushels.
"The corn stocks were off-the-charts bearish... stocks numbers undeniably bearish all around," said ABN Amro analyst Charlie Sernatinger.
Benchmark Chicago Board of Trade corn futures for May delivery fell their daily 40-cent trading limit to $6.95-1/4 per bushel while CBOT May wheat shed 5.3 percent, or 38-3/4 cents, to $6.98 per bushel as of 11:29 a.m. CDT (1629 GMT).
Corn futures had notched a seven-week high and wheat a five-week high in pre-report trading.
CBOT May soybeans were off 54-3/4 cents, 3.8 percent, at $13.99-1/4, on pace for their worst daily loss in 2-1/2 months, with the declines limited relative to corn after USDA estimated fewer-than-expected soybean acres.
The government estimated soy seedings at 77.126 million acres (31.2 million hectares), compared with average estimates of 78.394 million acres, which would have been the most ever.
USDA estimated corn plantings at 97.3 million acres, just above estimates of 97.252 million acres.
But traders were most surprised by the bigger stockpile of corn, with the quarterly drop in use of the grain as animal feed declining the most ever on a percentage basis, according to CHS Hedging Inc analyst Tim Emslie.
"We're obviously seeing the outcome of diminished demand. The higher prices really did more damage to demand than people wanted to believe and that has left us with a higher stocks number," said Citigroup futures specialist Sterling Smith.
The worst drought in five decades last summer reduced corn yields at harvest and also sent futures to a record-high in August, slowing demand for the yellow grain from ethanol producers, importers and livestock producers.