U.S. grains: Crop prospects drag on soybeans

Chicago | Reuters — U.S. soybean futures weakened on Wednesday, with prospects for bumper harvests in South America and record U.S. plantings weighing on the beaten-down market, traders said.

Corn and wheat futures also closed in negative territory. Both grains have fallen for three days in a row.

The outlook for rain in the U.S. Plains weighed on the wheat market and wheat closed at its lowest level since Feb. 7.

Corn remained under pressure from beneficial crop forecasts for production in Brazil. Corn prices hit a seven-week low.

The declines in all three commodities were kept in check as traders said recent weakness has left the markets oversold. Bargain buyers stepped in to support prices at session lows.

“Soybeans are a little weaker today, but continuing to trade in their choppy range of the past two weeks,” Farm Futures senior analyst Bryce Knorr said in a note to clients. “Rising forecasts for production in South America, combined with fears of a big increase in U.S. acreage this spring, continue to hang over the market.”

Brokerage INTL FCStone forecast that U.S. farmers would plant a record 87.3 million acres of soybeans this spring, up from 83.4 million acres a year ago. INTL FCStone forecast corn acreage at 91.6 million acres.

Chicago Board of Trade May soybean futures ended down 1-3/4 cents at $9.99-3/4 a bushel (all figures US$). Soybeans have declined for 11 of the last 13 sessions.

“Apart from Argentina, where soybean growing has become less attractive for political reasons, all key export countries will reap their highest-ever crops in the current 2016-17 season, Commerzbank said.

Demand worries also were in focus.

Negative crush margins in China were seen indicating there could be a slowdown in purchases from the world’s biggest importer of the beans.

Crush margin for imported soybeans in Shandong province slid to negative 121 yuan after remaining in positive territory between September and February.

CBOT May soft red winter wheat settled 4-1/4 cents lower at $4.22-1/4 a bushel.

“Global wheat stocks are huge and yields are looking big,” said Phin Ziebell, agribusiness economist at National Australia Bank. “Even though U.S. plantings are down this year, yields are expected to be good. Black Sea has a lot of wheat and Europe’s production outlook is good.”

CBOT May corn futures were 2-1/2 cents lower at $3.58-3/4 a bushel.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Nigel Hunt in London.

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