(Reuters) – Chicago soy fell for a third straight day on Wednesday, sliding to its lowest in more than three months, with renewed pressure from a forecast of higher production in the United States, where the harvest is being gathered at a record pace.
Wheat lost more ground, falling for seven out of eight sessions on forecasts of rain in the U.S. Plains, while corn dropped 0.7 percent, tracking losses in the soybean market.
Commodity brokerage INTL FCStone raised its estimate for U.S. corn and soybean production this season as farmers’ reports from the fields exceeded expectations.
The firm pegged 2012 U.S. corn production at 10.824 billion bushels, based on an average yield of 123.9 bushels per acre. Soybean production was seen at 2.849 billion bushels, based on an average yield of 38.2 bushels per acre.
The U.S. Agriculture Department’s latest outlook predicted farmers would harvest 10.727 billion bushels of corn and 2.634 billion bushels of soybeans.
“The FCStone estimate is showing higher yields, which means a lot less rationing needs to be done, and if this is the case then $15 a bushel soybeans are not justified,” said Victor Thianpiriya, agricultural strategist at ANZ Bank in Singapore.
“It will lead to significant downgrade in price forecasts.”
Chicago Board of Trade November soy fell 0.8 percent to $15.20-3/4 a bushel by 1102 GMT. On a continuation chart, the spot contract earlier slid to a low of $15.04 a bushel, the lowest price since June 29 and nearly $3 below its all-time high of $17.94-3/4 a bushel hit on Sept. 4.
December corn fell 1 percent $7.51 a bushel, while December wheat also lost 1 percent to $8.74-1/4 a bushel.
The U.S. Agriculture Department said the soybean harvest was 41 percent complete by Sept. 30, while the corn harvest was 54 percent finished, both a record pace.
A lull in export demand from top importer China, where markets are closed this week for a national holiday, also deprived the market of fresh bullish news.
On Tuesday, the soybean market faced additional pressure from losses in palm oil, which dived to its lowest in nearly three years.
Commodity funds sold an estimated net 9,000 contracts of Chicago Board of Trade soybean futures on Tuesday, trade sources said. They sold 3,000 wheat contracts and bought 3,000 corn contracts.
Investment bank Goldman Sachs said it expected corn and wheat prices to outperform soybean prices over the next few months due to bigger-than-expected U.S. soybean supplies reported by the government last week.
Goldman said in a research note on Monday that it lowered its three- and six-month soybean price forecasts to $18.75 and $17.25 a bushel, respectively, from its previous outlook for $20 and $18.
Wheat fell for the seventh time in eight sessions on forecasts for rain in the drought-parched U.S. Plains, which was expected to boost winter wheat planting.
The market is keeping a close watch on Egypt’s tender to buy an unspecified volume of wheat from global suppliers for Dec. 11-20 shipment.
The country had been buying wheat mainly from the Black Sea region but supplies are tightening after drought this year and the world’s largest wheat importer has boosted purchases of French wheat in recent tenders.
European milling wheat futures <0#BL2:> were only slightly lower with front month November down 0.1 percent at 259.00 euros a tonne.
