U.S. grains: Soybeans drop as imports ease supply tightness

Chicago | Reuters — U.S. soybean futures slid Monday as increased imports of the oilseed from South America were expected to alleviate tight supplies in the U.S., the world’s top producer of the crop.

Wheat futures jumped after touching a three-week low in the previous session. Traders worried that unfavourably dry conditions will persist in key growing areas of the U.S. Plains, threatening the upcoming harvest.

Concerns about low soybean supplies eased with traders “talking about even more being imported” after a bulk shipment of Brazilian soybeans arrived at the U.S. Gulf Coast on Saturday, said Jim Gerlach, president of A/C Trading.

“Anything’s possible in terms of bringing it in to the country,” he said.

U.S. soy supplies have been gobbled up by domestic crushers and foreign buyers like China, the world’s top importer of the oilseed.

Private exporters struck deals to sell 120,000 tonnes of U.S. soybeans to China for delivery in the 2014-15 marketing year, which starts on Sept. 1, the U.S. Department of Agriculture (USDA) said.

Chicago Board of Trade May soybeans dropped 9-1/2 cents, or 0.6 per cent, to settle at $14.64-1/4 a bushel (all figures US$).

CBOT May wheat futures gained 6-1/2 cents, or one per cent, to $6.76-1/4 a bushel. They had lost 3.7 per cent last week, falling 0.9 per cent to a three-week low on Friday as rain forecasts eased crop concerns.

Weekend rains in the U.S. Plains breadbasket were lighter than expected, and there were doubts that an upcoming storm system would bring significant relief to the crops.

USDA delays report

USDA delayed until Tuesday the release of its first weekly crop-progress report of 2014, which was expected to show a decline in U.S. winter wheat condition ratings due to persistent dryness.

Analysts estimated the crop’s good-to-excellent rating at roughly 35 to 40 per cent, compared with 62 per cent in late November, and 36 per cent a year ago.

“It has deteriorated quite a bit,” said Art Liming, futures specialist with Citigroup, about the crop.

Technical buying helped underpin the wheat market ahead of a monthly USDA supply/demand report on Wednesday that is expected to tighten the government’s outlooks for U.S. supplies of wheat, corn and soybeans.

“Wednesday’s report certainly has the potential to surprise, but pales in comparison to weather and production information,” said Joseph Vaclavik, president of Standard Grain.

Corn had recently drawn some support from strong export demand and fears that cold weather across the U.S. could delay plantings. However, analysts said the concerns looked overblown because modern farm machinery allows growers to catch up quickly on planting when conditions improve.

CBOT May corn slipped 2-1/2 cents, or 0.5 per cent, to settle at $4.99-1/4.

Commodity funds sold an estimated 6,000 corn contracts, bought 4,000 wheat contracts and sold 5,000 soybean contracts, traders said.

— Tom Polansek reports on agriculture and ag markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris, Colin Packham in Sydney and Julie Ingwersen in Chicago.

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