Livestock Wins and Fertilizer Stocks Lose with New Corn Supply

The USDA reported that corn (NYSE:CORN) stockpiles surpassed forecasts by 150 million bushels, causing fertilizer stocks to drop, while chicken producers have benefited from lower feed prices. Mosaic (NYSE:MOS) dropped 6.9% and CF Industries (NYSE:CF) fell 7.3%, while Sanderson Farms (NASDAQ:SAFM) and Tyson Chicken (NYSE:TSN) both rose 4.3%.

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The surplus stockpile has been attributed to a higher use of wheat in livestock rations, reducing the need for corn. A recent survey predicted stockpiles at approximately 942 million bushels, but September 1 brought totals of 1.128 billion. Yet the USDA reported an estimated 15% of crops were harvested as of September 25, an 11% percent decrease from last year, which could be a result of weather-damaged crops.

In an interview with Businessweek.com, Dale Durchholz of AgriVisor LLC said “the biggest price factor for corn over the next month will be the size of the upcoming harvest. As prices moved lower the past month, that may have improved demand for corn.”

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