Chicago | Reuters –– U.S. soybean futures sagged 1.5 per cent to their lowest in almost five months on Tuesday, with export demand for U.S. supplies fading amid the expanding harvest in Argentina and Brazil, traders said.
“The fundamentals are not friendly here; the South American crops are coming in with good yields,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.
“We need a reason to spark some short covering, and I don’t see one yet,” he added.
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Corn and wheat futures also notched sharp declines. Poor export demand weighed on corn while wheat shrugged off concerns about dry weather in the U.S. Plains as investors locked in profits after prices hit two-week highs during overnight trading.
Traders said the huge domestic stockpiles of all three commodities will continue to anchor prices until a closely watched U.S. Agriculture Department report at the end of the month shifts the focus to expectations for the next marketing year.
“We really do not have anything new to trade on until we get this planting intentions report,” said Dewey Strickler, president of grain consultancy Ag Watch Market Advisers. “I think the story is that we have ample supplies.”
Chicago Board of Trade May corn futures fell eight cents to $3.71 a bushel (all figures US$). The new-crop December contract was 7-1/2 cents lower at $3.96-3/4 a bushel, falling below the key $4/bu. level.
China, the world’s second-largest corn consumer, has booked over 600,000 tonnes of corn from Ukraine this year and more deals from the Black Sea are expected as Beijing’s stockpiling dries up supplies and boosts domestic prices.
CBOT soybean futures for May delivery ended down 14-3/4 cents at $9.54-1/2 a bushel.
Expectations of a surge in U.S. soy plantings in the coming weeks added to the pressure hanging over the market.
“Surveys of farmers suggest that acreage has been significantly expanded, whereas the USDA actually estimated a marginal decline,” Commerzbank said in a market note.
Commerzbank also said the recent weakness of Brazil’s real currency had also increased the competitiveness of the country’s soybean exports against rival U.S. supplies.
CBOT May wheat was 10-1/2 cents lower at $5.03-1/2 a bushel.
The U.S. Agriculture Department said on Monday afternoon that Kansas winter wheat was rated 41 per cent good to excellent, down from 46 per cent in the previous week. Ratings for Oklahoma winter wheat fell two percentage points to 40 per cent good to excellent.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Nigel Hunt in London.
