US soyabean futures fell from a six-month high on Tuesday as traders booked profits ahead of highly anticipated crop reports due at the end of the week. Wheat prices came under heavier pressure as concerns eased about poor weather hurting global production, and corn prices also weakened.
Overshadowing all the activity in the markets was uncertainty about US Department of Agriculture quarterly grain-inventory and prospective plantings reports due on Friday. The department's estimates often cause wild price swings. Soyabeans for May delivery lost 9-3/4 cents, or 0.7 percent, to $13.69-3/4 a bushel at the Chicago Board of Trade.
Corn for May delivery ended down 7 cents, or 1.1 percent, to $6.30-3/4 a bushel. Soft red winter wheat for May delivery slid 19-3/4 cents, or 3 percent, at $6.39-3/4 a bushel. Traders took money off the table after soyabeans climbed on Monday on increasing concerns about drought reducing output in South America. Crop losses in South America have increased demand for US soyabeans, with the US Department of Agriculture reporting private exporters struck a deal to sell 120,000 tonnes to top importer China.
But in a move to even out positions ahead of the reports, some speculative traders unwound long soyabean/short corn spread trades, said Tim Hannagan, analyst for PFG Best. "Today they just unwound it as part of the balancing act," he said. "This is a week when funds don't want to add more risk to their longs." Corn traders also nervously awaited the data, as corn futures have tumbled by the daily trading limit on the day of the past three quarterly inventory reports.
The USDA will estimate soyabean inventories as of March 1 at 1.387 billion bushels, up from 1.249 billion bushels a year earlier, and corn inventories at 6.15 billion bushels, down from 6.523 billion a year earlier, according to a Reuters poll of analysts. The USDA's last quarterly stocks report on January 12 pegged corn supplies as of December 1 at 9.642 billion bushels - 251 million bushels more than the average trade estimate for 9.391 billion.
"Everybody keeps staring out there at Friday's numbers and they get more and more confused about what they should see or not see," said Jerry Gidel, analyst for Rice Dairy. Firm corn basis levels indicate inventories of the grain may be even tighter than expected, said Jim Gerlach, president of A/C Trading.