Grain prices surged about 4 percent Tuesday after the U.S. Department of Agriculture said U.S. farmers planted the smallest wheat crop since 1973 and as corn supplies dwindle from record consumption by livestock herds.
Wheat had its biggest day since April 17, rising from a three-year low after the USDA said farmers planted 4 percent fewer acres with winter wheat than they did in 1996.
The drop suggests that falling prices in September and October led farmers to plan for other crops. Wheat had tumbled 15 percent since September.
Corn, the largest U.S. crop, worth $25 billion, staged its biggest rally since Aug. 12 after the USDA said it expects corn supplies to shrink 11 percent more than it originally forecast before the start of the new harvest in the fall. USDA said livestock consumption will offset weaker sales to Asia.
“A surprise in the domestic supply situation led to the bounce today,” said John Walsh, president of Walsh Trading in Chicago. “Corn and wheat had been the whipping post of the markets.”
