Grains-Soybeans, Corn Fall as Focus Turns to Bumper U.S. Crops
Category: Grains
(Agriculture.com) – Chicago soybeans and corn fell on Tuesday, with market attention returning to growing expectations of bumper U.S. crops and good progress with U.S. harvests.
Chicago Board of Trade most-active soybeans were down 0.2 percent at $8.55-1/2 a bushel at 1110 GMT. Corn fell 0.5 percent to $3.63-3/4 a bushel. Wheat climbed 0.1 percent to $5.10-1/4 a bushel.
Corn and soybeans rose sharply on Monday after the United States, Canada and Mexico reached a trade pact to replace the North American Free Trade Agreement (NAFTA).
“Soybeans and corn are being weakened today by new forecasts that (the) U.S. crop will be large, plus good U.S. harvest progress,” said Matt Ammermann, commodity risk manager with INTL FCStone. “Wheat is being underpinned by hopes the U.S. could win more export business.”
“Markets rose on Monday on relief that the new U.S.-Mexico-Canada Agreement will mean that U.S. agricultural exports will not be disrupted by an end to the previous NAFTA deal. Today corn and soybean markets are torn between this relief and the return of focus on the prospects of huge harvests in the U.S. and Brazil.”
INTL FCStone on Monday raised its estimate of the average U.S. 2018 corn yield to 182.7 bushels per acre (bpa), from 177.7 bpa in August. The brokerage raised its forecast of the U.S. 2018 soybean yield to 54.0 bpa, up from 53.8 bpa.
Brazil’s 2018-19 soybean crop is seen reaching a record 120.4 million tonnes, a Reuters poll found.
“The INTL FCStone estimate has again underlined the huge crops on the way in the United States,” Ammermann said. “But today’s relatively modest price fall may also be an indication that the prospect for these large crops has been accepted by the market.”
Some selling pressure was also seen. “Overnight, traders took on a subdued ‘Turn-Around Tuesday’ approach to trade, with some profit taking noted early in the night session,” said U.S. brokerage Allendale.
The U.S. Department of Agriculture (USDA) said after the market close on Monday that 23 percent of the U.S. soybean crop had been harvested as of Sunday, above the five-year average of 20 percent.
The USDA said 26 percent of the corn crop was harvested, matching analyst forecasts and up from the five-year average of 17 percent.
“The USDA showed decent progress with U.S. corn and soybean crops with no reason for immediate concern despite some rain expected,” Ammermann said.