Chicago agricultural commodities drop sharply on supply outlook, stronger dollar

Chicago Board of Trade (CBOT) grain and soybean futures dropped sharply Tuesday as the U.S. dollar climbed and fallout continued from a recent government report forecasting bigger-than-expected crops this year.

The most active corn contract for December delivery fell 9.5 cents, or 2.8 percent, to 3.3 dollars per bushel. December wheat delivery dropped 8.25 cents, or 2.02 percent, to 4.01 dollars per bushel. November soybeans ended down 20.25 cents, or 2.1 percent, to 9.44 dollars per bushel.

A stronger U.S. dollar as well as lower corn and soybean markets dragged wheat prices lower, erasing gains posted in the previous session.

Soybean prices led the declines, sliding for a second consecutive session after the U.S. Department of Agriculture on Monday boosted its outlook for production above the level analysts had anticipated.

The USDA said growers will harvest a record 4.2 billion bushels of soybeans on yields of 50.6 bushels an acre, which beat the expectations of most analysts.

According to the government, farmers will collect a record 15.09 billion bushels of corn on yields of 174.4 bushels an acre this fall. That compares to analyst forecasts for 14.97 billion bushels on yields of 172.9 bushels an acre.

Corn and soybean prices also were pressured by federal data released on Monday showing the nation's crops remain in stellar health thanks to ample Midwest rainfall in September.

Wheat futures slumped along with weaker corn and soy markets, with prices anchored by abundant global supplies. Endit