Soya posts biggest drop in a year

US soyabean futures tumbled the daily trading limit on Monday, posting their biggest percentage drop in nearly a year on selling sparked by anecdotal accounts of better-than-expected harvest yields in the Midwest farm belt. Corn at the Chicago Board of Trade tumbled to a more than two-month low while wheat sank 5 percent under the weight of the soyabean market, which was considered to be the strongest fundamentally of the three. Soya's stocks-to-use ratio, a measure of demand, was the lowest in nearly five decades.
CBOT November Soyabeans fell 70 cents per bushel - the most a soya contract can move either way on a trading day under exchange rules - on farmers' accounts of better-than-expected yields in harvesting over the weekend. Some of the better yields were coming from the western Midwest, an area that had remained dry as the worst drought in half a century devastated crops. The northern and eastern parts of the Midwest got beneficial rains in August. Prices for Soyabeans in the cash markets in Iowa, the top corn and soyabean state, fell sharply about two weeks ago, perhaps an early signal that yields would exceed expectations.
Traders also attributed the selloff to rains in Brazil, the world's second-largest exporter of Soyabeans after the United States, as its farmers gear up to plant their crop. CBOT November soya slid 4 percent to $16.69 a bushel and registered the lowest front-month price since August 20.
CBOT new-crop December corn sank 4.4 percent, or 34 cents, to $7.48 a bushel and touched the lowest price for a nearby contract since early July. After US trading hours, the US Department of Agriculture's weekly crop progress report showed 10 percent of the soyabean crop was harvested as of Sunday, up from 4 percent a week ago and just ahead of the average trade expectation of 9 percent complete. Twenty-six percent of US corn was harvested versus 15 percent a week earlier and slightly better than the expected 24 percent.
December wheat fell 5 percent, or 46-1/4 cents, to $8.78 per bushel. The severe US drought in the Midwest drove nearby corn prices to a record high in early August and pushed Soyabeans to an all-time top in early September, leading to thoughts that buyers would ration demand in the face of high prices.