US soyabean and grain futures extended their retreat on Tuesday as traders awaited the release of a US government report due on Friday which is expected to reveal raised crop size estimates. Benign weather ahead of the approaching harvest has increased confidence that the United States will produce crops even bigger than the record levels already forecast by the US Department of Agriculture.
Corn dropped below $3.00 per bushel for the first time this year as the market awaited traders in the United States to return after a long weekend in the United States. Wheat continued to linger around the lowest point in more than two years after dropping 5 percent last week on ample US supplies and world stocks and reports of strong hard red spring wheat yields now coming out of the Northern Plains.
"People have been saying that corn should have a two in front of it and wheat a three," said Colin Lethbridge, trading desk manager at FCStone. He said the market was supply focused, factoring in big supplies as the harvest approaches in the US cornbelt where most of the country's corn and soyabeans were grown.
"Private forecasts are already pointing to bigger crops on the back of yield increases so the USDA data (on Friday) will only confirm the forecasts already in the market," said Lethbridge. Chicago Board of Trade corn for September delivery fell 0.25 percent to $299 per bushel while September soyabeans lost 0.83 percent to $9.53. Wheat for September delivery held at $4.44 per bushel but December delivery retreated 0.37 percent to $4.70.
Soyabeans turned bearish as supply concerns eased after weeks of nervousness about tight soyabean supplies ahead of harvest and chances of early frost cutting yields. Investors are betting that the danger is over and bigger crops are now "made", even though an early frost may cut yields.