U.S. grains: Soy slips, corn drops on EPA biofuel plan

U.S. soybean futures fell 2.5 per cent on Friday to a one-week low, with traders citing softening cash markets, favourable crop weather in South America and profit-taking after Thursday’s six-week high.

A private estimate for big U.S. soybean acreage next year also weighed on prices.

Corn prices fell late in the session after the Obama administration proposed lowering the federal target for U.S. 2014 biofuel use, including corn-based ethanol. Wheat edged lower.

Corn, wheat and soybeans each posted weekly losses, with wheat notching its fourth straight decline.

Soybeans led the declines, pressured by weakening U.S. cash values. Grain merchants in southern Indiana said deliveries of soybeans were the largest of the season this week and some elevators had hours-long backups of trucks delivering soybeans.

“The softer basis and mediocre exports sales are weighing on the market,” Sterling Smith, futures specialist at Citigroup, said in note to clients. “For the January soybeans the air above $13 is starting to get thin. South American weather continues to be supportive of crop development and planting, and this is keeping the bulls well fenced in.”

At the Chicago Board of Trade, January soybean futures settled down 33 cents at $12.80-1/2 a bushel after hitting $12.78, a new low for the week (all figures US$). The contract posted its biggest single-session loss in percentage terms since Sept. 30.

Argentine farmers had planted 21.8 per cent of expected soybean area by Thursday, in line with a year earlier, after recent rains improved seeding conditions, the Buenos Aires Grains Exchange said.

The U.S. Agriculture Department reported export sales of U.S. soybeans in the latest week at 848,500 tonnes for 2013-14, less than the 900,000 to 1.2 million tonnes analysts expected.

Soybean, corn and wheat traders noted updated 2014 acreage forecasts from widely followed analytical firm Informa Economics.

Informa on Friday estimated next year’s U.S. soybean plantings at a record-high 83.8 million acres, below the firm’s previous forecast of 83.9 million but still up from 76.5 million seeded in 2013.

“If people believe Informa, they have got to be selling. Informa is talking about a seven million-acre increase in bean acres next year,” said Roy Huckabay with the Linn Group, a Chicago brokerage.

In a note to clients, Informa also projected 2104 corn plantings at 91.5 million acres, down from 95.3 million in 2013, and all-wheat plantings at 58.1 million acres, up from 56.2 million in 2013.

The soy market shrugged off news of a huge October soybean crush. The National Oilseeds Processors Association (NOPA) on Friday said the U.S. soy crush last month totaled 157.063 million bushels, above an average of analysts’ estimates for 154.3 million.

NOPA also reported U.S. soyoil stocks for October at an eight-year low of 1.356 billion pounds, down from 1.372 billion in September.

Corn falls late on biofuels proposal

CBOT corn fell to session lows after the U.S. Environmental Protection Agency proposed slashing federal requirements for U.S. biofuel use in 2014, including corn-based ethanol.

CBOT December corn settled down 4-1/2 cents at $4.22 per bushel, down 1.1 per cent for the week.

The EPA did not propose a specific 2014 volume for ethanol made from corn. But the proposed change in advanced biofuels implies a corn ethanol mandate of 12.7 billion to 13.2 billion gallons, down from the previous 2014 mandate of 14.4 billion gallons.

The move was seen as a clear win for oil refiners and a loss for biofuel producers. It followed a prolonged lobbying blitz on both sides of the issue.

“EPA’s ruling would be devastating for family farmers and the entire rural economy,” the National Corn Growers Association said in a statement.

Corn fell despite weekly U.S. corn export sales totaling 1.2 million tonnes, topping analysts’ forecasts.

CBOT wheat ended lower after weekly U.S. wheat export sales of 287,900 tonnes fell well below expectations.

CBOT December soft red winter wheat settled down 1/4 cent at $6.44-1/2 per bushel, down 0.8 per cent for the week.

— Mark Weinraub and Julie Ingwersen report on ag commodity market for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

Related story:
Deep cut proposed for U.S. 2014 biofuel requirement, Nov. 15, 2013

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