Corn and wheat prices dropped recently after a government report showed that U.S. supplies were larger than first thought, reports the U.S. Department of Agriculture.

Corn and wheat prices plunged recently after a government report showed U.S. supplies were larger than anticipated. Corn ended 6.3% lower and wheat dropped 6.9%. Many other commodities prices also fell, which finalized a bumpy third quarter. Corn stockpiles totaled 1.13 billion bushels, with wheat stockpiles totaling 2.15 billion bushels as of Sept. 1, according to the U.S. Department of Agriculture, Washington, D.C. Both figures were higher than traders’ estimates. Soybeans totaled 215 million bushels, less than expected.

Corn prices have been higher versus this time a year ago because of expectations that the grain would be in short supply in the United States and abroad. Higher corn prices factor into what consumers pay for many kinds of products, including cereal, beverages and ethanol. Analysts say the revised estimates could mean some of the higher consumer prices may start to ease in the next six months.

“If there's more profit margin at the packer level and at the wholesaler level, then some of that should be passed onto retailers,” and lead to lower grocery prices, says Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, Lafayette, Ind.

December corn fell 40 cents to end at $5.925 per bushel. The price is down about 5.8% for 2011, but it's still up 19% compared to the same time last year.

December wheat fell 45 cents to end at $6.0925 per bushel and November soybeans fell 51 cents to $11.79 per bushel.

Source:Associated Press via Googlenews