U.S. grains: Soy falls on big supply, set for worst quarter in six years

(Lisa Guenther photo)

Chicago | Reuters –– U.S. soybeans fell one per cent on Tuesday, pressured by a record harvest, as traders shrugged off a U.S. Agriculture Department report that showed domestic supplies shrank to less than a 10-day supply at the beginning of the month.

Soybean futures capped a nearly 35 per cent quarterly decline — the biggest since 2008 — as the advancing harvest was expected to replenish supplies depleted by huge exports to top buyer China.

Corn and wheat also eased, solidifying big quarterly losses at the Chicago Board of Trade following the release of USDA’s quarterly grain stocks report at midday.

USDA said soybean stocks as of Sept. 1 were a razor-thin 92 million bushels, versus the trade guess of 126 million. Indicated usage during June-August was 313 million bushels, up six per cent on the year.

“We skated by on the beans — 90 million bushels isn’t a whole heck of a lot,” said analyst Jack Scoville of the Price Futures Group in Chicago. “But we managed to find enough beans to get us through the end of the (marketing) year and we’re in harvest now.”

Grain prices have tumbled as the U.S. dollar rallied to multiyear peaks against a basket of other currencies, making U.S. supplies less competitive in global markets just as farmers here were gathering record harvests of corn and soy.

Quarterly corn stocks have a history of shocking markets but Tuesday’s figure, just 0.4 per cent above expectations at 1.236 billion bushels, was not a major surprise.

In a companion report, USDA said this year’s wheat crop totalled 2.035 billion bushels, up five million from its previous estimate and just below the analysts’ average guess. The winter wheat crop was below expectations and the spring wheat crop somewhat larger than expected.

Most-active CBOT November soybeans fell 10-1/4 cents to $9.13-1/4 per bushel, near their 4-1/2 year low reached on Monday (all figures US$). Prices for the beans shed 16 per cent during September in the fifth consecutive monthly decline.

CBOT December corn futures were down five cents at $3.20-3/4 per bushel after earlier notching a fresh five-year low on Tuesday of $3.19-1/2 per bushel. Corn prices lost nearly 25 per cent for the quarter and 11 per cent for the month.

CBOT December wheat was down 3-1/4 cents at $4.78, hovering above its contract low set last week and falling 15 per cent during the quarter. The monthly decline of 13 per cent was the largest in three years.

“There’s definitely a bearish slant to it (the report). The ending stocks were on the higher end of the range for corn. The wheat stocks number indicates lower-than-expected usage — the higher stocks number wasn’t from the higher production and indicates less feeding demand in the last quarter,” said Shawn McCambridge, analyst at Jefferies Bache.

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

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