U.S. grains: Bumper crops drag soy to biggest yearly loss in decade


Chicago | Reuters –– U.S. soybean futures fell Wednesday and ended 2014 with their biggest loss in a decade as bumper production in the U.S. and South America replenished global supply of the protein-rich oilseed.

Corn and wheat also fell during the session and posted annual declines against a backdrop of ample worldwide supply. But full-year losses were limited by a fourth-quarter rebound prompted by concerns over Russian wheat exports and strong corn demand.

Soybean and corn prices could come under additional pressure early next year as South American farmers harvest expected bumper crops after largely favorable growing weather. This should benefit grain buyers such as livestock and poultry producers, ethanol makers and importers.

Meanwhile, ample global supplies may anchor wheat prices, although supplies of the highest quality grain remain tight.

Trading on Wednesday was light as the year-end period kept some operators away from their desks and encouraged others to make small adjustments to their books.

“Today is more of a money game than anything else, people shuffling money around,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana.

Chicago grain markets will be closed on Thursday for the New Year’s Day holiday.

Chicago Board of Trade January soybeans fell 18-1/2 cents, or 1.8 per cent, to $10.19-1/4 a bushel, with technical selling deepening earlier losses (all figures US$). Selling accelerated as the contract fell below a recent swing low around $10.25 as well as its 10-, 20- and 50-day moving averages.

CBOT March corn declined for a third straight day and slipped below its 20-day moving average and the key support level of $4 a bushel. The contract shed 9-1/2 cents, or 2.3 per cent, and closed at a near-two-week low of $3.97 a bushel.

CBOT March wheat dropped 12-1/4 cents, or two per cent, to 5.89-3/4 a bushel, the lowest since Dec. 11.

Over the year, spot soybean prices fell 22.3 per cent, compared with a 5.9 per cent decline for corn and a 2.6 per cent drop for wheat.

All three markets hit multi-year lows at the end of September before recovering sharply in the final quarter as robust demand, supply snags in the U.S. soybean market and uncertainty over export policy in Russia fuelled a wave of fund buying.

Investors are turning their attention to crops in South America. A few Brazilian farmers have already started harvesting soybeans, with the bulk of harvest set to ramp up in February.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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