Corn futures drop 6% on larger supply in latest speculative unraveling in the commodities markets

Corn futures dropped on Tuesday as concerns about abundant supply whacked America's biggest cash crop. It's the latest trading volatility in the commodities sector as the pandemic and the economic reopening distorted markets and led to big speculation in areas like lumber.

Corn futures for July delivery fell 6% to $6.18 a bushel, a one-month low.

Corn came under pressure a day after the U.S. Department of Agriculture said in a Crop Progress report that U.S. farmers had planted 90% of intended corn acres as of Sunday, ahead of the five-year average of 80%.

The above-pace planting, the result of sufficient rain in the U.S. Midwest, appeared to counter concerns stemming from lingering Chinese demand for corn.

Corn, like other agricultural commodities, has seen its price climb over the last 12 months as businesses work to preempt future inflation and resupply inventory as economies return to normal activity after the Covid-19 pandemic.

Including Tuesday's pullback, corn futures are up 28% in 2021 and 95% over the past year.

Corn is a crucial component in many items at supermarkets, ranging from tortilla chips to bourbon. About 40% of the U.S. crop is blended into motor fuel.

China has in recent months purchased large amounts of corn in an effort to fatten of hogs to replace those it killed during an outbreak of African swine fever prior to the coronavirus pandemic.

July soybeans fell about 10 cents to $15.13 a bushel while wheat dropped about 5 cents to $6.57 a bushel.