Chicago | Reuters — Chicago soybean futures dropped on Tuesday to the lowest seen since December 2020, after a U.S. government report pegged soybean and corn production to be bigger than traders had previously expected.
The monthly world agricultural supply and demand estimates (WASDE) report pegged the soybean crop at 4.448 billion bushels, and soybean yields at 51.5 bushels per acre.
Corn futures also fell after the U.S. Department of Agriculture (USDA) estimated both the corn crop currently being harvested, and the corn yields, were higher than expectations. Wheat got a boost from USDA’s forecast that global wheat ending stocks were the lowest seen in five years, due in part to droughts in the northern U.S. and Canada that hurt production.
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For some commodity futures traders, the number confirmed rumbles among U.S. farmers who have been reporting larger-than-expected corn and soybean crops.
“It proves out what the combines have been saying — that the yields are bigger,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
The larger-than-expected corn and soybean crops could be a welcome boon to food manufacturers, which have wrestled with rising food prices; energy companies, which have been battered by volatile oil pricing; and meatpackers, which are concerned about high costs of crops used primarily to feed livestock.
It also raised questions about whether corn and soybean futures prices could continue to fall as the U.S. harvest progresses, or whether a seasonal low has now been set, traders said.
“The report was bearish beans, bearish corn, and raises the question: Do these markets deserve to be at these prices if this is going to be the carryout?” said Craig Turner, senior ag broker at Daniels Trading. “And the answer is probably no.”
The most-active soybean contract on the Chicago Board Of Trade (CBOT) settled the session down 30 cents at $11.98-1/4 a bushel, after earlier dipping to its lowest since December 17, 2020 (all figures US$).
CBOT corn settled down 10-1/2 cents at $5.22-1/2 a bushel, while wheat settled up 2-1/4 cents at $7.34 a bushel.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Christopher Walljasper in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.
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