U.S. grain and soybean futures tumbled on Wednesday as traders adjusted positions ahead of crop reports on Friday that are expected to raise U.S. production and global supply estimates.
At the Chicago Board of Trade, the front-month wheat contract hit its lowest since May 2012 while the nearby corn contract touched a five-week low.
New-crop November soybeans came under additional pressure and set a contract low after Monsanto, the world’s largest seed company, reported an increase in soybean seed sales.
Monsanto president Brett Begemann said U.S. farmers were ordering seeds for spring planting against a “lower expected planted acreage base” for corn.
“We see some shifting in acres between crops,” he said, raising expectations for increased soybean plantings.
CBOT March soybeans slid 6-3/4 cents to $12.69-1/4 a bushel, while November soybeans sank 12-3/4 cents to $11.04 a bushel (all figures US$).
The planting outlook came two days before the U.S. Department of Agriculture issues its final U.S. crop production estimates for the 2013-14 marketing season. USDA also will update its outlook for U.S. and global grain supplies and demand.
Expectations for increased production and supply estimates weighed broadly on the markets, traders said. Commodity funds sold an estimated 14,000 corn contracts, 5,000 wheat contracts and 2,000 soybean contracts at the CBOT, they said.
March corn ended down nine cents at $4.17 a bushel. March wheat dropped 13-3/4 cents to $5.88-3/4 a bushel.
“Everybody’s looking for gloom and doom and big crops,” said Jerry Gidel, chief feed grains analyst for Rice Dairy in Chicago.
World corn inventories are forecast to increase by 0.5 per cent to 163.2 million tonnes, while world soybean inventories are expected to expand by 1.3 per cent to 71.53 million tonnes, according to a Reuters poll of analysts.
USDA is expected to increase its estimate for U.S. corn production by 0.6 per cent to 14.066 billion bushels and its estimate for U.S. soybean production by 0.6 per cent to 3.279 billion bushels, analysts said.
“Soybean prices are going to come off,” said Paul Deane, agricultural commodity strategist at ANZ in Melbourne. “The USDA increasing its estimates for global stocks might be the catalyst.”
Private exporters reported the sale of 115,000 tonnes of U.S. soybeans to China for the 2013-14 marketing year, which began on Sept. 1, the USDA said on Wednesday.
USDA on Tuesday reported a sale of 350,000 tonnes of U.S. soybeans to China, the world’s top soybean importer.
Corn prices weakened despite word that China is relaxing checks on the corn by-product distiller’s dried grains. China has recently rejected about 600,000 tonnes of U.S. corn when shipments were found to contain traces of unapproved genetically-modified organisms.
— Tom Polansek reports on the ag sector and commodity futures markets for Reuters from Chicago. Additional reporting for Reuters by Carey Gillam in Kansas City, Michael Hogan in Hamburg, Naveen Thukral in Singapore and Nigel Hunt in London.