Soyabeans fell 1.7 percent on Tuesday for their biggest two-day selloff in seven weeks as a record pace in the harvest and expectations of improved yields following late summer rains suggested the market may have seen its 2012 highs. Analysts monitored technical charts for any sign that the market will repeat what it did this time last year - erase about 20 percent of its value between the start of September and early October when the soyabean crop was being harvested.
Wheat and corn futures fell 1 percent under pressure from soyabeans, after moving between minor gains and losses most of the session in the absence of fresh fundamentals. Chicago Board of Trade November soyabeans fell 1.7 percent to end at $16.40. December corn futures ended 1 percent lower at $7.40 per bushel.
December wheat fell 1.7 percent to $8.63-1/2 per bushel after gaining 1 percent earlier. Market action was centred in soyabeans, as it was on Monday, when prices tumbled the daily trading limit of 70 cents - about 4 percent - on anecdotal accounts that Midwest harvest yields are better than expected. A Reuters poll of 14 analysts on Tuesday put the soyabean yield at 35.85 bushels per acre, up from the government's latest forecast of 35.3 bushels on September 12.
The surprising yields are leading some analysts to predict that soyabean ending stocks will not dip below the psychologically important level of 100 million bushels. The US Department of Agriculture has forecast stocks at 115 million bushels by next summer. "There is a discussion of stronger production and ending stocks not falling below 100 million bushels," said Rich Nelson, chief strategist at Allendale Inc. in McHenry County, Illinois.
With soyabean prices soaring 30 percent after the worst drought in half a century began showing its teeth in June, the rally to a record high of $17.94-3/4 per bushel on September 4 primed the market for a major correction, some analysts said. But others have set price targets at $20 per bushel in the coming months on expectations for a short crop and USDA projections that the stocks-to-use ratio, a measure of demand, will be the tightest in five decades. And it will be another four to five months before soyabeans harvested in South American agricultural powerhouses Brazil and Argentina are ready for shipment to global markets.
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