(Wall Street Journal) – U.S. soybean prices tumbled 3.6% on Monday, marking their largest one-day drop for a front-month contract since August, as the Agriculture Department said the record 2014 harvest was even larger than expected and forecast higher supplies this year than analysts anticipated.
Wheat futures also declined, while corn futures rose.
The USDA, in a closely watched series of reports, said U.S. farmers produced 3.969 billion bushels of soybeans last year on yields of 47.8 bushels an acre. Both estimates broke records and came in at more than analysts’ expectations thanks to the near-perfect growing conditions seen across much of the U.S. Midwest last season.
The government didn’t alter its estimate for robust U.S. soybean stockpiles at the end of the 2014-15 season in August, renewing concerns that ample domestic supplies will further pressure prices that already have fallen sharply over the past two years.
Soybeans for January delivery, lightly traded as the contract nears expiration, dropped 38 cents, or 3.6%, to $10.13 1/2 a bushel on the Chicago Board of Trade. March soybeans, the most-actively traded contract, declined 36 1/4 cents, or 3.4%, to $10.16 a bushel.
“I think bean prices may be nearing their crop year high,” said Terry Reilly, an analyst at brokerage Futures International in Chicago, adding that a strong start to South America’s harvest combined with raised USDA forecasts for production in Brazil marked “another nail in the coffin for prices.”
Corn prices nudged higher after the USDA trimmed its estimate for the size of last year’s crop, which also was a record. Production totaled 14.216 billion bushels on yields of 171 bushels an acre, down from its previous estimate in November of 14.407 billion bushels on yields of 173.4 bushels an acre. Analysts had projected production at 14.366 billion bushels.
Corn inventories at the end of the 2014-15 season on Aug. 31 will total 1.877 billion bushels, down from last month’s forecast of 1.998 billion bushels, the USDA said.
Still, Mr. Reilly said, with U.S. exports expected to “remain ho-hum,” prices could drift lower in the coming days.
March corn futures added 1 3/4 cent, or 0.4%, to $4.02 a bushel on the CBOT.
Wheat futures fell to a nearly seven-week low after the USDA forecast higher-than-expected U.S. inventories at the end of the season on May 31.
The USDA pegged domestic reserves this spring at 687 million bushels, up from last month’s forecast of 654 million. Wheat inventories at the start of last month rose to 1.525 billion bushels, a more than 3% increase from the same date in 2013.
CBOT March wheat fell 8 1/4 cents, or 1.5%, to $5.55 1/2 a bushel, the lowest settlement price since Nov. 25.
