Chicago | Reuters — U.S. soybean futures fell on Friday, with the nearby contract touching its lowest level in more than 10 weeks, under pressure from hefty global supplies, while soybean meal futures approached a six-year low.
Expanding inventories and concerns about sluggish demand also pushed front-month corn futures to their lowest price in more than six weeks.
The markets weakened after the U.S. Department of Agriculture projected U.S. corn supplies will rise to 12-year highs during the 2016-17 crop year as gains in production outstrip demand hikes.
U.S. soybean stocks are expected to fall slightly, but traders said large harvests in South America will keep world supplies large.
“Combined U.S. stocks of the major crops are growing at a time when global stocks are already considered burdensome,” JP Morgan analyst Ann Duignan said.
Nearby soybean futures slid four cents to $8.55 a bushel at the Chicago Board of Trade (all figures US$). The March contract traded as low as $8.54-1/2, the lowest price for a front-month contract since Dec. 17.
Nearby soybean meal ended down $2.80 at $257.20 per short ton, after trading to its lowest level since 2010.
Nearby corn futures dipped one cent to $3.54-1/2 a bushel, after trading to their lowest level since Jan. 12. And nearby wheat lost two cents to $4.43-1/4 a bushel, after trading near a 5-1/2-year low reached on Wednesday.
Sharp declines in wheat prices could prompt livestock producers to use cheap wheat as animal feed, instead of corn.
Supply concerns put broad pressure on the grains a day after the USDA predicted that U.S. farmers will increase corn plantings above analysts’ expectations.
Big ending stocks “are going to continue being an anchor on prices,” said Dax Wedemeyer, a broker and grains analyst for brokerage U.S. Commodities in Iowa.
“There are not any real weather issues to speak of in South America, or in the Midwest affecting wheat,” he said.
Consultancies Franca Junior and Agroconsult this week raised their estimates for Brazil’s 2015-16 soybean harvest in a sign losses from irregular rain in Mato Grosso last year were not as steep as originally thought.
Commodity funds sold an estimated net 5,000 corn contracts, and 4,000 contracts each of soybeans and wheat.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.