CHICAGO, June 12 (UPI) -- The U.S. Department of Agriculture said the corn crop would be smaller than previously predicted, but that caught traders off guard Wednesday.
In a monthly report, the USDA said corn inventories in the summer of 2014 would stand at 1.94 billion bushels, a 3 percent drop from last month's forecast.
The price of corn went down anyway, the opposite direction of where supply and demand fundamentals would predict.
With less supply, the prices should be expected to go up.
But the price dropped, because traders expected the USDA to announce a stockpile decline on the order of 12 percent.
Traders were positioned for a report that was expected to say there would be far less corn available next year. But the USDA's estimate was more conservative than expected.
The USDA now expects the 2013 harvest to yield 14 billion bushels, down from last month's 14.1 billion prediction due to continued cool temperatures and wet fields, which are keeping farmers from putting seeds in the ground.
Corn requires a long growing season compared with many crops, so it is to a farmer's advantage to put seeds in the ground as soon the soil warms up to the point where it is safe to do so.
On the Chicago Board of Trade Wednesday, July delivery corn dropped 9 ¼ cents to $6.50 ¼ per bushel.
Soybeans were also lower, off ¾ cent to $15.39 ¾. Wheat lost 13 ¾ to $6.83.