CANBERRA: Chicago soybean futures fell on Wednesday and were close to last week’s two-year low on expectations of a bumper harvest in Argentina and weak Chinese demand for imported beans.
Corn futures also dipped as plentiful global supply held prices around Friday’s three-year low, while wheat rose from a seven-week low hit on Tuesday.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.3% at $12.23-1/2 a bushel by 0519 GMT, having fallen to $12.03 on Friday, its lowest since November 2021.
Rain in South America has lifted the supply outlook for soybean and corn crops there, and the US government on Friday raised its estimates for US yield and production levels for the recently ended US soybean harvest.
“Expectations of big crop in South America have got everyone running for the hills,” said Ole Houe at IKON Commodities in Sydney, adding that prices didn’t have much further to fall.
“The market is overshooting a bit,” he said.
An analyst at Argentina’s Rosario grains exchange said production forecasts for the country - currently at 52 million metric tons for soybeans and 59 million tons for corn - would likely continue to rise.
Harvest estimates in Brazil have also become more optimistic after a dry period ended, although a grain farmers’ association on Tuesday forecast a 135-million-ton soybean crop, far below a government estimate of 155 million tons.
Soybeans head for fourth weekly loss as supply outlook improves
Positive US data supported soybeans on Tuesday, with weekly export inspections on the higher end of trade expectations and US soybean processors crushing more soybeans in December than in any previous month.
However, US soybean exports have been weak in recent months amid a glut of cheap supply from Brazil.
Demand from top importer China is also expected to slow in the first quarter of this year as a shrinking pig herd in the country dents demand for feed.
CBOT corn was down 0.2% at $4.42-1/2 a bushel after hitting $4.41 on Friday, the lowest since December 2020, while wheat was up 0.3% at $5.83-1/2 a bushel after slipping as low as $5.77 on Tuesday.
Top wheat exporter Russia is expecting a 143 million-147 million ton grain harvest in the coming season, the third bumper crop in a row.
However, cold temperatures may have damaged some winter wheat in the United States and Canada’s abnormally dry winter is worsening drought conditions across the western provinces, where most of the country’s grain is produced.
Chicago soybeans, corn and wheat are down by between 5% and 7% so far this month and speculators are betting on further falls.
A strengthening US dollar has added pressure on prices by making US agricultural products less attractive to importers.