CBOT soybeans slip on hopes for rain in U.S. Midwest

U.S. soybean futures slipped on Tuesday on forecasts for modest rainfall that could bring some relief to crops stressed by recent dryness in the U.S. Midwest.

Corn and wheat futures edged higher on positioning ahead of U.S. government crop reports due out on Thursday.

The U.S. soybean crop is in its weather-sensitive, pod-setting stage of development, and a turn to hot, dry weather in August and early September has been trimming yield potential. Prices last week approached an 11-month high on concerns about crop damage.

However, light showers will fall in parts of the Midwest this week and showers next week are expected to help boost yield prospects for later maturing soybeans, according to MDA Weather Services.

Midday weather forecasts predicted more rain than previously expected in southern Iowa, the top soybean- and corn-producing state, and in northern Missouri from Sunday to Monday, said Andy Karst, meteorologist for World Weather Inc.

“We’re expecting a more scattered-shower-type pattern than the model is predicting,” he said. “There may be some decent coverage in Iowa and Nebraska, but it’s going to be pretty light.”

Chicago Board of Trade November soybeans were down 1-1/2 cents to $13.55 a bushel (all figures US$).

Traders are paying close attention to U.S. crop weather because large harvests are needed to replenish low inventories. U.S. soybean supplies were at a nine-year low at the end of August, while corn supplies hit a 17-year low, according to USDA data.

There is more uncertainty than usual about crop size because soybeans and corn were planted later than normal in the spring due to rains, postponing the start of the autumn harvest.

Awaiting USDA

Traders are waiting for updated signals about the autumn harvests from the U.S. Department of Agriculture, which is set to release a monthly crop production report on Thursday.

USDA is expected to trim its soybean yield estimate to 41.2 bushels per acre from 42.6 bushels in August, according to a Reuters poll. Analysts project USDA will cut its estimate for the average corn yield to 153.7 bushels, down from the 154.4 bushels forecast in August.

“The rest of the week will be all about Thursday’s USDA report,” said Joseph Vaclavik, president of brokerage Standard Grain.

Early harvest

The corn harvest has started in the southern U.S., where large yields have been reported, but is still in its earliest phases. Prices are expected to come under more pressure as the harvest advances.

December corn rose 5-1/2 cents to $4.69 a bushel, while December wheat gained 5-1/4 cents to $6.46-1/2 a bushel.

Egypt, the world’s biggest importer of wheat, bought 235,000 tonnes of Russian, Romanian and Ukrainian wheat for shipment Nov. 11-20, and canceled a shipment for Nov. 1-10, the main government wheat buying body said on Tuesday.

Egypt has bought Black Sea wheat in five tenders it issued over roughly two weeks, none from the U.S.

In other export news, private exporters struck deals to sell 121,000 tonnes of U.S. soybeans to unknown destinations for delivery in the marketing year that began Sept. 1, according to USDA.

— Tom Polansek reports on the ag sector and futures markets for Reuters from Chicago. Additional reporting for Reuters by Agnieszka Flak in Milan and Colin Packham in Sydney.

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