Corn plunged the most in nine months, sparking a slump in soybeans and wheat, after the U.S. government said domestic inventories were bigger than analysts forecast and that farmers will plant the most since 1936.

Inventories of corn on March 1 fell to a nine-year low of 5.399 billion bushels in the U.S., the world's biggest grower and exporter, mostly because last year's drought cut output, the Department of Agriculture said today. While that's down 10 percent from a year earlier, analysts in a Bloomberg survey were expecting a drop to 4.995 billion. Farmers will sow 97.282 million acres, up from 97.155 million in 2012, the USDA said.

Eoin Treacy's view This news story highlights not so much that there has been a massive improvement in inventories but rather that the news is not as bad as was expected. Inventories are still close to record low levels. Record yields will be required over a number of years to improve those figures. In the meantime the outlook for grain and bean pricing is skewed towards a further test of underlying trading as this new data is absorbed.

Corn had rallied back to test its 7-month progression of lower rally highs and pulled back sharply today. A sustained move above 750 ¢ would be required to question medium-term scope for continued lower to lateral ranging. Wheat has exhibited a similar pattern since November. Soybeans has been ranging mostly between 1350 ¢ and 1500 ¢ since November, and pulled back towards the lower side today. Oats hit a new 18-month peak yesterday but retraced most of the advance today. Today's news also stalled Rough Rice's rebound.