Chicago Board of Trade soyabean futures fell nearly 2 percent on Tuesday after the US Department of Agriculture projected domestic stocks would rise to 500 million bushels by the end of the 2015/16 marketing year, a nine-year high if realised. Corn ended almost unchanged after sliding to its lowest level in a week on rapid US planting progress. Wheat posted modest losses.
At the CBOT, bellwether July soyabeans settled down 18-1/2 cents at $9.55-1/2 per bushel. July corn ended up 1/2 cent at $3.61 a bushel, and July wheat fell 1/2 cent to $4.80-1/2 a bushel. Soyabeans fell as USDA's first forecasts of US and world soyabean stocks for the 2015/16 marketing year topped trade expectations. "It's a little bit of sticker shock at 500 million bushels," Karl Setzer, a market analyst at MaxYield Co-operative, said of USDA's figure for US 2015/16 soyabean ending stocks. "It's been years since we've seen a number like that."
USDA also forecast that South America would claim a larger share of the global soya trade as US exports decline. "(US) soyabean export demand being cut on a year-to-year basis, that's probably beating this market down more than anything," said Jack Scoville at the Price Futures Group. Corn futures posted fractional gains as funds covered short positions after a largely neutral report from USDA, and analysts turned their attention back to US crop weather. USDA said the corn crop was 75 percent seeded, ahead of the five-year average of 57 percent.
"The question is, now that the crop is in the ground and can be hurt by weather, will we get any adverse weather that will lower that yield potential? And if so, the balance sheet will shift considerably and prices are way undervalued," said Brian Hoops of Midwest Marketing Solutions.
Wheat slipped after USDA projected domestic and global stockpiles would rise in 2015/16, but losses were limited by a weaker dollar and the fact that funds already hold a large net short in wheat. The dollar slumped against the euro after a spike in German Bund yields rattled markets. "The record net short by the managed funds is very sensitive to the dollar at this stage," said Mike Zuzolo of Global Commodity Analytics.