(Wall Street Journal) – Soybean futures fell to the lowest level in 19 months as the U.S. harvest accelerates amid improved crop conditions and after the Department of Agriculture Monday said stockpiles at the start of last month were higher than expected. Corn dropped to a three-year low.
The U.S. soybean harvest was 11% complete as of Sunday, up from 3% a week earlier, and crop conditions improved to 53% good or excellent, up from 50% a week earlier, according to the government. In a quarterly stockpiles report Monday, the USDA said about 141 million bushels of soybeans were in storage on Sept. 1, more than the 126 million forecast by analysts surveyed by Dow Jones Newswires. Money managers who were net-long on soybeans, or bet prices would rise, are selling contracts and pressuring prices, analysts said.
“We got a little shower over the weekend which was helpful–the really late soybeans gained some benefit,” said Dave Marshall, a farm marketing adviser at Toay Commodity Futures Group in Nashville, Ill. “The funds have been so long on beans and they’re trying to reverse that. As they reverse their previous positions, that’s having a good impact on prices.”
Chicago Board of Trade soybean futures for November delivery fell 14 3/4 cents, or 1.1%, to $12.68 a bushel. The price earlier touched $12.64 a bushel, the lowest intraday price for a front-month contract since Feb. 22, 2012.
Corn futures for December delivery on the CBOT dropped 4 1/2 cents, or 1%, to $4.37 a bushel, after declining to $4.36 3/4 a bushel, the lowest since Sept. 3, 2010.
About 12% of the U.S. corn crop was harvested as of Sunday, an increase from 7% the prior week, according to the government. As collection of the grain continues, prices will be pressured further as more will be available for ethanol producers and animal feeders, Mr. Marshall said.
The USDA said Monday that inventories of corn on Sept. 1 totaled 824 million bushels, up from the 688 million forecast by analysts. Wheat supplies were pegged at 1.855 billion bushels, down from the average estimate of 1.938 billion, as farmers probably used more of the grain in animal rations.
“Yesterday’s report implied there was a great deal of substitution of corn and wheat,” Mr. Marshall said. “The fact that we had smaller wheat stocks and larger corn stocks than expected implies there was about a one-to-one substitution.”
Wheat futures for December delivery gained 2 3/4 cents, or 0.4% to $6.81 a bushel in Chicago.
