U.S. grains: Soybeans sag as South American crop prospects improve

Chicago | Reuters — Chicago Board of Trade soybean futures fell to a three-week low on Tuesday on improving weather in Argentina and rising estimates of Brazil’s soybean crop, while corn and wheat futures hit life-of-contract lows.

CBOT January soybeans settled down 6-3/4 cents at $9.75-3/4 a bushel after dipping to $9.75, the contract’s lowest since Nov. 17 (all figures US$).

CBOT March corn ended down 1-1/4 cents at $3.47-3/4 after posting a contact low at $3.47-1/2, and March wheat fell 2-3/4 cents at $4.10-3/4 a bushel after recording a contract low of $4.10-1/2.

Soybeans fell on expectations for rain this weekend in dry areas of Argentina, the world’s top soymeal exporter and the No. 3 corn supplier.

As for Brazil, the No. 1 soybean exporter, Brazilian government food supply agency Conab forecast the country’s 2017-18 soybean crop at 109.2 million tonnes, topping its month-ago range of estimates for 106.4 million to 108.6 million tonnes.

Separately, Abiove, a Brazilian oilseed processors association, raised its crop estimate to 109.5 million tonnes, from 108.8 million previously.

The U.S. Department of Agriculture in a monthly supply/demand report Tuesday left its estimates of the Brazilian and Argentine soy crops unchanged.

However, USDA raised its forecast of U.S. 2017-18 soybean ending stocks to 445 million bushels, from 425 million last month, after cutting its U.S. soy export forecast due to strong competition from South American producers.

Corn futures turned down after USDA’s report briefly lifted values. CBOT March corn hit a session high after USDA cut its forecast of U.S. 2017-18 corn ending stocks to 2.437 billion bushels, down from 2.487 billion in November and below an average of trade expectations.

The tighter stocks forecast reflected a 50 million-bushel increase in the USDA’s estimate of the amount of 2017-18 U.S. corn used for ethanol.

“The one thing that stood out is that USDA took corn for ethanol up… But with (the) stocks-to-use still (ratio) at 16.8 per cent, it’s really nothing worth getting excited about,” said Karl Setzer, an analyst with Iowa-based MaxYield Cooperative.

CBOT wheat sagged on technical selling and a fresh reminder of hefty world supplies as the USDA raised its forecast of 2017-18 global wheat ending stocks to 268.4 million tonnes, from 267.5 million last month, already a record high.

Underscoring stiff export competition, top global wheat importer Egypt bought 295,000 tonnes of Russian and Romanian wheat in a tender to which no U.S. wheat had been offered.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Michael Hogan and Naveen Thukral.

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