NEW YORK (AP) — Soybeans plunged Wednesday after the government reported that stockpiles of beans are larger than expected. Corn and wheat also fell sharply in response to the Agriculture Department report.

The department said 2010 looks to be another record year of soybean production. May soybeans fell 33 cents, or 3.4 percent, to settle at $9.41 a bushel. Wednesday’s slide was similar to the drop in early January after a crop report showed bigger-than-expected soybean production.

“They found more soybeans than (traders) ever imagined,” Richard Feltes, director of commodity research for MF Global, said of the USDA’s latest plantings report.

The department also said farmers intend to plant 78.1 million acres of soybeans in 2010. That would be less than 1 percent more than last year, but still set a new record.

Feltes noted that farmers will likely end up planting even more soybeans and corn than are estimated in the initial report. That would extend the pattern of the past two years. Corn for May delivery fell 9.5 cents, or 2.7 percent, to $3.45 a bushel.

The USDA estimates farmers will plant 88.8 million acres of corn this year, a 3 percent jump from each of the past two years.

Wheat prices also fell, dropping 21.5 cents, or 4.6 percent, to $4.505 a bushel.

Farmers expect to plant 9 percent less wheat in 2010, but they ended up planting 2 percent more winter wheat than previously estimated, the USDA said. A total of 53.8 million acres of wheat are expected to be planted this year.

Meanwhile, metals mostly rose as the dollar dropped. Metals including gold and silver typically rise when the dollar falls. They act as a hedge against weaker currencies and become more attractive to foreign investors because they are priced in dollars.

The ICE Futures US dollar index, which measures the dollar against six currencies, fell 0.6 percent Wednesday.

Gold for June delivery rose $8.80 to settle at $1,114.50 an ounce. May silver rose 19.6 cents to settle at $17.526 an ounce. Copper was one of the few metals to drop, falling 1 cent to $3.5535 a pound.

Energy prices also got a boost from the falling dollar. Benchmark crude for May delivery rose $1.39 to $83.76 a barrel on the New York Mercantile Exchange.

In other Nymex trading in April contracts, heating oil rose 3.99 cents to settle at $2.1646 a gallon, and gasoline gained 3.53 cents to settle at $2.31 a gallon.

Wednesday is the last day for trading the April heating oil and gasoline contracts, and most traders have switched over to May contracts. May heating oil rose 4.74 cents to settle at $2.1790 a gallon, and May gasoline added 3.51 cents to settle at $2.3072 a gallon.

Natural gas for May delivery fell 10.4 cents to settle at $3.869 per 1,000 cubic feet.

If you enjoyed this post then Subscribe to Savvy Investor via RSS