Chicago | Reuters –– U.S. soybean futures dropped more than two per cent on Tuesday, extending the previous session’s steep losses after the U.S. Department of Agriculture raised its production forecast well above market expectations.
Corn futures also fell as USDA projected a record-large U.S. crop that would outstrip demand, and as updated acreage data suggested the agency could further increase its harvest outlook next month.
Wheat futures slumped along with weaker corn and soy markets, with prices anchored by abundant global supplies.
A firming U.S. dollar created further headwinds for commodities markets, including crude oil, which fell more than one per cent.
Chicago Board of Trade November soybeans fell 20-1/4 cents, or 2.1 per cent, to $9.44 a bushel after closing down 1.6 per cent on Monday (all figures US$).
CBOT December corn shed 9-1/2 cents, or 2.8 per cent, to $3.30 a bushel. CBOT December wheat dropped 8-1/4 cents, or two per cent, to $4.01 a bushel.
Record demand for soybeans has paled in comparison to the expected sharp gains in supply, which will leave U.S. farmers and commercial operators with a growing stockpile of the oilseed even as exports and crushing continue to rise.
USDA on Monday raised its soybean forecast for record production by 141 million bushels, with the average U.S. yield seen at an all-time high of 50.6 bushels per acre following ideal growing weather during the key development month of August.
“The trade’s focus is mostly on production right now and that yield number, which surpassed all guesses, is still having an effect here today,” said Rich Nelson, chief strategist with Allendale Inc.
USDA trimmed its corn harvest outlook slightly from the previous month, but the crop is still expected to be the largest on record.
Acreage data released by USDA’s Farm Services Agency (FSA) late Monday suggested the corn and soybean harvested area may be even larger than the agency reported on Monday.
Based on the FSA data, USDA may increase its corn acreage forecast by at least 200,000 acres in next month’s crop report and soybean area by at least 100,000 acres, analysts said.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.