Soybeans drop to near six-year low on US Midwest rains

US soybean futures fell to multiyear lows on Wednesday in a broad-based commodities selloff and as widespread rains in the US Midwest were expected to boost yields. Wheat hit lows for several contract months, pressured by sluggish demand and hefty global supplies, but ended above session lows.
Corn, however, notched modest gains in nearby contracts on reports of lower-than-expected yields in the eastern Midwest, although advances were limited by weak commodities markets overall.
Widespread selling in energy and metals markets dragged the 19-commodity Thomson Reuters/Core Commodity CRB Index down 1.5 percent to its lowest point since December 2002. Copper also hit a six-year low on concerns over demand in China, while crude oil fell to the lowest in 6-1/2 years.
"You have a global situation where commodities are not in favour. That includes the fund arena that is liquidating positions," said Gordy Linn, president of the Linn Group.
"The rain has given people reason to sell beans, and they are," he added.
Chicago Board of Trade November soybeans were down 10-3/4 cents, or 1 percent, at $8.93-1/2 a bushel after earlier hitting a contract low of $8.90-3/4, the lowest point for the most actively traded soybean contract in nearly six years.
The January through September 2016 contracts also posted contract lows.
US weather forecasts show widespread rain in the coming week, which should help soy crops in dry parts of the Midwest. August weather is critical for determining the size of the US soybean crop.
December corn rose 1-1/4 cents, or 0.3 percent, to a one-week high of $3.78-1/2 a bushel, buoyed by long corn/short soybean spreading and by field reports from an annual Midwest crop tour this week that suggest the US Department of Agriculture's yield forecast is too high.
"The data coming out of the Pro Farmer tour is suggesting that yields are not nearly as high in the eastern Corn Belt as the USDA said last week. That's keeping some of the sellers on the sidelines," said Mike Zuzolo, president of Global Commodity Analytics.
CBOT September soft red winter wheat was up 2 cents, or 0.5 percent, at $4.96-1/4 a bushel, while September hard red winter wheat was down 1-3/4 cents, or 0.5 percent, at $4.74-1/4. Deferred contracts in both commodities hit contract lows.