U.S. grains: New-crop soybeans fall below $10 as big harvest looms

(Lisa Guenther photo)

Chicago | Reuters –– U.S. benchmark new-crop soybean futures dropped below US$10 a bushel on Tuesday, pressured by strong yield reports from the start of the harvest and diminished fears about frost in the Midwest, traders said.

New-crop futures in soybeans, corn and wheat all fell to contract lows, fueling chart-based selling.

At the Chicago Board of Trade, benchmark November soybeans settled down 15-3/4 cents at $9.92-3/4 per bushel after setting a contract low at $9.91-1/2 (all figures US$).

December corn ended down four cents at $3.44-1/4 after setting its low at $3.43, and December wheat fell six cents at $5.27-1/2 after dipping to $5.23-1/4.

Soybeans sagged two days ahead of a monthly U.S. Department of Agriculture crop report in which analysts expect the government to raise its already record-high forecasts for the U.S. corn and soybean crops.

In a weekly progress report late Monday, USDA rated 74 per cent of the corn crop and 72 per cent of the soybean crop as good to excellent, the highest ratings in early September for those crops in 20 years.

“With the best row crop ratings since 1994… record yields are at hand,” said Rich Feltes, vice president of research at R.J. O’Brien, adding that early harvested yield reports from producers have been “stellar.”

“We may just have another year on our hands like 1992, 1994 or 2004. Those are all years when we had big August-to-final gains in both corn and soybean yields,” Feltes said.

Frost remains a worry for both crops, which are maturing slowly in northern areas. But a cold snap predicted late this week is expected to cause only patchy frost from North Dakota through southern Minnesota and far northern Iowa.

“Widespread frost is still not expected, limiting the potential for significant crop damage,” MDA Weather Services said in a note to clients.

Concerns over potential frost injury drove the only gain, on Sept. 5, in corn prices in the last seven sessions.

Wheat futures followed soy and corn lower, with added pressure from expectations that USDA will raise its forecast of 2014-15 global wheat ending stocks this week.

One exception to the weak trend was front-month September soymeal, which ended up $7.50 at $453.70 per short ton on strong cash values as processors wait for the soy harvest to reach the heart of the Midwest and replenish tight supplies.

“Erratic cash markets still indicate the desperate need for additional quick delivery supplies at some locations,” Helen Pound with KCG Futures wrote in a client note late on Monday.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Sybille de La Hamaide in Paris.

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