Chicago Board of Trade (CBOT) soybean futures fell over one per cent on Wednesday on long liquidation anticipating heavy movement soon of soybean supplies from South America’s bumper harvest.
Slow sales of soy from Brazil and Argentina have been helping lift soybean futures but traders said they expected movement to increase soon.
Spot May which has recently been boosted by tight domestic soy stocks, slow farmer selling and soaring cash markets fell the most in 1-1/2 weeks and new-crop November fell for the fourth consecutive trading session, the longest losing streak in 2-1/2 months.
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“Seasonal declines should be expected in soybeans and this despite the red hot domestic cash market. I think there was liquidation ahead of expected exports soon from South America as they get their logistics worked out,” said Don Roose, president of U.S. Commodities, Des Moines, Iowa.
Soybean spot cash basis bids soared as much as 27 cents per bushel around the U.S. Midwest on Wednesday, with bids rising to the highest levels ever for this time of year at most processors and elevators round the region, dealers said (all figures US$).
Wheat fell despite likely additional freeze damage on Wednesday to portions of the U.S. Plains hard red winter wheat crop. Some pressure on wheat stemmed from a Statistics Canada report on Wednesday forecasting Canadian wheat plantings at 26.618 million acres, the most in 12 years.
“Absolutely the number (Canadian plantings) is a big new input today and a bearish market factor. The plantings estimate was 2.4 million above most estimates so it’s a big deal,” said Terry Linn, analyst for Chicago trade house The Linn Group.
Corn staged a cautious rebound in a technical bounce from its slide to a two-week low the previous session and on hesitant sales of corn by farmers, traders said.
“Corn is finding support on light farmer selling. We’re working up to first notice day for deliveries and I don’t think anyone is expecting any corn to be delivered,” said Shawn McCambridge, analyst for Jefferies Bache.
The first day that traders can issue delivery notices against the spot or old-crop May contract is Tuesday and the tight supply of corn is leading to forecasts by analysts and traders for little to no corn to be delivered, a bullish market factor.
CBOT corn for May delivery was up one cent per bushel at $6.39-1/2, May soybeans were down 15-3/4 cents at $14.04, and wheat for May delivery was down 5-3/4 at $6.91-3/4.
Corn market searching for answers
Corn futures remain choppy and at times volatile due to uncertainty about U.S. planting weather as the sowing falls further behind average pace.
The wet and cold weather that has been stalling U.S. corn plantings also supported the corn futures market although there were forecasts for improved crop seeding weather next week.
Corn plantings have fallen well behind the average pace for the season, leading to some concerns about possible production declines due to late plantings.
Also, the recent heavy rains that have nearly eliminated stress from the worst drought in more than 50 years in the U.S. heartland were seen boosting crop prospects for the 2013 season and capping gains in the corn futures market.
Crop forecaster Lanworth said on Wednesday it has raised its outlook for 2013-14 U.S. corn and soybean production due to the recent rains that boosted yield expectations.
Lanworth said it expects the corn harvest to be a record 13.93 billion bushels, up from its previous outlook of 13.72 billion issued two weeks ago. It upped its soybean production view to 3.42 billion bushels from 3.38 billion.
Wheat eases despite Plains freezes
CBOT wheat was lower despite another freeze on Wednesday that may have harmed the U.S. Plains hard red winter wheat crop.
“It’s difficult to get speculators to buy into it because there is a lot of wheat around and also we won’t know the extent of damage for awhile,” said Sterling Smith, market strategist at Citigroup.
Kansas City Board of Trade (KCBT) hard red winter wheat futures were flat to firm and gained relative to CBOT wheat due to the hesitant sales of KCBT contracts after the freeze.
Also CBOT May wheat declined, KCBT May rose 1-3/4 cents.
Freezing temperatures in the U.S. southwest Plains early on Wednesday probably harmed more of the U.S. winter wheat crop, an agricultural meteorologist said.
“There was another freeze, and this may be the most damaging one so far,” said Andy Karst, meteorologist at World Weather Inc. “Temperatures fell to the teens and low 20s F in most of the Texas Panhandle, southwest Oklahoma and extended into southern Kansas.”
Commodity Weather Group said temperatures fell to lower-than-expected levels in the Plains states early Wednesday.
“The net result is up to 30 per cent losses possibly from southwestern Oklahoma and bordering sections of the Texas Panhandle northward into southwestern Kansas,” said CWG meteorologist Joel Widenor. Those areas represent more than 25 per cent of the hard red winter wheat acreage, Widenor said.
A series of freezes in April has harmed the chief bread-making hard red winter wheat in the U.S. Plains states of Texas, Oklahoma, Colorado and Kansas.
— Sam Nelson reports on the CBOT grain and soy futures markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago and Rod Nickel in Winnipeg.
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