(Nasdaq) – U.S. soybean futures advanced Monday, buoyed in part by government forecasts for fewer-than-expected acres to be harvested this year, which will curb domestic supplies of the oilseed.
Meanwhile, grains declined.
Soybean prices rose, gaining for a second consecutive session following a closely watched report released by the U.S. Department of Agriculture on Friday that cut federal estimates for harvested soybean acres to 82.4 million, lower than both the government’s month-ago projection for 83.5 million, and the average analyst estimate for 82.9 million. The lower figure suggests some acres planted last spring were abandoned during the growing season due to adverse conditions like flooding.
Still, gains in the soybean market were capped, analysts said, since the USDA on Friday also increased its estimate for soybean yields to reflect large harvests throughout the U.S. Midwest, resulting in a slightly bigger-than-expected forecast for soybean production. Analysts said dryness in South America, a rival soybean producer, also helped bolster prices on Monday.
“There is an underlying El Nino concern,” said Rich Nelson of commodities-advisory firm Allendale Inc. in McHenry, Ill., noting that the weather pattern could promote dry conditions in northern Brazil. “We could see problem’s for Brazil’s soybean crop, with dryness impacting yields during the growing season,” he said.
Soybean futures for November delivery rose 6 3/4 cents, or 0.8%, to $8.92 1/2 a bushel at the Chicago Board of Trade.
Corn prices edged to a fresh two-week low, extending losses posted on Friday after federal forecasters increased their outlook for U.S. crop yields this autumn, projecting farmers would harvest the nation’s third-biggest corn crop ever. Market watchers had expected the USDA to trim its yield forecast for corn due to rainy weather early in the growing season that swamped fields in the eastern Midwest, but the government projected large yields in the western Midwest, including Iowa, Minnesota and Nebraska.
Largely favorable weather in the U.S. Farm Belt further pressured prices on Monday, as clear skies will help speed the nation’s harvest, analysts said.
CBOT December corn shed two cents, or 0.5%, to $3.80 3/4 a bushel, the lowest intraday price since Sept. 24.
Wheat prices declined to a two week low, buffeted in part by USDA forecasts on Friday for larger-than-expected U.S. and global stockpiles. Prices for the grain in September fell to five-year lows, as ample world wheat inventories and tepid demand for U.S. supplies weighed on prices for the crop.
Wheat prices also were pressured by improved prospects for rain in the former Soviet Union, a rival grain-producing region where dry soil conditions recently have prompted concerns over the health of winter wheat crops.
Still, said Mr. Nelson, wheat prices likely wouldn’t fall too far until the rainfall was confirmed. “We want to see the moisture hit,” he said.
CBOT December wheat dropped 3 3/4 cents, or 0.7%, to $5.05 1/2 a bushel, after falling to $5.03 1/4 the lowest since Sept. 30.
