Soybeans dropped for a second day in Chicago, heading for a third monthly loss, on speculation that rain forecast for the U.S. Midwest will help improve yields after concern about recent dryness bolstered prices.
The Midwest may see scattered rain early next week before more widespread precipitation develops toward the end of the week, Commodity Weather Group said in an e-mailed report today. While soil moisture remains adequate in most areas after rain earlier this summer, parts of the Midwest saw less than 25 percent of the normal amount of precipitation in the last two weeks, according to the National Weather Service. U.S. corn and soybean crops are still developing in the best condition in at least 10 years, government data show.
"A more favorable weather outlook is going to have a bearish impact on prices," Graydon Chong, an analyst at Rabobank International, said by phone from Sydney today. "Any positive news on the weather front means the prospect of higher yields. The market is expecting very large crops of corn and soybeans particularly out of the U.S."
Soybeans for November delivery fell 0.8 percent to $10.8575 a bushel at 7:13 a.m. on the Chicago Board of Trade. Yesterday, futures rose to the highest in more than a week at $11.165 a bushel before closing 1.2 percent lower on speculation that cool temperatures would limit potential yield losses from dry weather. The oilseed is down 6.2 percent in July on the outlook for a record U.S. crop. A third straight month of losses would be the longest run of declines since April 2013.
Corn for December delivery dropped 0.5 percent to $3.6925 a bushel, heading for a 13 percent loss in July and extending declines in the two prior months. The U.S. harvest may be the second-largest ever, the U.S. Department of Agriculture says.
Seventy-five percent of corn in the main U.S. growing areas was in good or excellent condition as of July 27, the best shape since 2004, USDA data show. Soybean crops, rated 71 percent in top condition, were in the best shape for this time of year since 1994.
Wheat for September delivery climbed 0.3 percent to $5.2175 a bushel after tumbling to $5.185 yesterday, the lowest for a most-active contract since July 2010. Futures are poised for a third month of declines, the longest such run since December 2012. In Paris, milling wheat for November delivery fell 0.3 percent to 174.50 euros ($233.86) a metric ton on Euronext, after touching 174.25 euros, the lowest since December 2011.
Farmers in the Northern Hemisphere are currently harvesting winter wheat, with 83 percent of crops collected in the U.S. and 44 percent of harvesting complete in the main growing areas of France. Ukraine’s grain production may be bigger than previously expected at 57.4 million tons, UkrAgroConsult said yesterday.
Egypt, the world’s top wheat importer, is seeking to buy the grain in a tender today, and prices for supplies from the Black Sea region probably will be the most competitive, Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, said in a report.