Chicago | Reuters — U.S. soybean futures slipped about four per cent on Monday as forecasts for favourable weather in the Midwestern crop belt prompted investors to liquidate long positions, traders said.
Corn and wheat followed soybeans lower, and declines in the energy sector pressured the broader commodity sector. The 19-market Thomson Reuters CoreCommodity CRB Index fell 1.5 per cent as crude oil fell on heightened worries of an oil glut.
At the Chicago Board of Trade, new-crop November soybean futures settled down 41-1/2 cents at $9.61-1/2 per bushel (all figures US$). December corn ended down 8-1/2 cents at $3.34-1/4 a bushel and September wheat settled down 1-3/4 cents at $4.06.
Soybeans posted the biggest declines on forecasts for good weather in August as the crop sets pods, a key factor in determining yields.
“Showers continued across the southern and eastern Midwest and Delta this past weekend, which further improved soil moisture supplies for corn and soybeans. Rains should remain abundant across these same areas this week,” MDA Weather Services said in a note to clients.
The soybean market gave back advances posted on Friday that had been tied to a drop in the value of the U.S. dollar.
“It’s a combination of the dollar not extending its losses, and the non-threatening weather forecast,” Ted Seifried, chief market strategist for Zaner Ag Hedge, said of Monday’s sell-off in soybeans.
After the CBOT close, the U.S. Department of Agriculture rated 72 per cent of the U.S. soybean crop as good to excellent, up from 71 per cent the previous week. The USDA rated 76 per cent of the corn crop as good to excellent, unchanged from the week before.
Analysts surveyed by Reuters had expected a decline in ratings for both crops.
Also after the close, commodity brokerage INTL FCStone, in its first forecasts for U.S. 2016 crops, projected corn production at 15.146 billion bushels and soybean production at 4.054 billion bushels. Both figures would represent the largest U.S. crops on record, if realized.
CBOT wheat closed lower, hovering just above a 10-year low, but the market traded higher at times on fund short-covering and fears that crop problems in France could boost demand for ample world supplies.
Consultancy ODA Groupe lowered its estimate of this year’s French soft wheat crop to 28.2 million tonnes, down 2.2 million from its previous figure, pegging production at its lowest in 28 years in the European Union’s biggest wheat grower.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.