U.S. grains: Soybeans fall, pull corn from highs

(Keith Weller photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures plunged 4.7 per cent to their lowest in nearly two months on Thursday, weighed down by forecasts for good weather for crop development across the U.S. Midwest.

The sharp drop in soybeans weighed on corn, which settled close to unchanged as traders locked in profits from a surprise rally early in the session.

“The rains and good weather that is helping the U.S. corn crop is now starting to poke its head into the soybean yield window,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.

“So far this looks like an absolutely picture perfect post Fourth of July weather hangover, with the corn crop making it through pollination with a smile, and beans off to a good start.”

Corn had firmed on support from a cut to the estimate of Brazil’s harvest that sparked hopes of a pick-up in export demand for U.S. supplies for grain, traders said.

U.S. wheat futures closed in negative territory but remained above the 10-year lows hit earlier this week after a short-covering rally fizzled out, with traders turning their focus to a bountiful U.S. harvest that promises to add to the global supply glut of the grain.

CBOT November soybeans ended down 48-1/2 cents at $10.24-3/4 a bushel (all figures US$).

Soybeans notched their fourth straight session of losses, their longest losing streak since one of equal length in mid-May.

“The U.S. near-term weather narrative remains decidedly bearish,” Commonwealth Bank of Australia (CBA) analysts said in a note, citing forecasts of more rain in the U.S. Midwest. “On balance U.S. crops are in very good shape.”

Expectations by weather forecasters that the onset of the La Nina weather pattern, which could trigger a dry summer in the U.S. Midwest, had been pushed back to September suggest soybeans will not get hit during their key development stage in August, CBA analysts said.

“The less threatening outlook will continue to weigh on the market,” they added.

Chicago Board of Trade corn futures for December delivery ended up 1/4 cent at $3.48-1/2 a bushel. CBOT September soft red winter wheat futures were three cents lower at $4.25-1/2 a bushel and

Corn’s early strength stemmed from a forecast from Brazil’s Conab that lowered its outlook for the country’s corn production to 69.14 million tonnes from 76.22 million, largely due to problems with the second crop.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Manolo Serapio Jr. in Manila and Sybille de La Hamaide in Paris.

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