Soybeans slipped ahead of a U.S. Department of Agriculture report that may cut the outlook for domestic production, amid speculation falling corn prices will prompt farmers in South America to favor planting the oilseed.
The USDA may cut its soybean forecast by 3.7 percent from a month ago, according to a Bloomberg survey of analysts. While the corn outlook may be cut by 0.9 percent, that crop is still expected to be a record, according to the survey. Corn prices have declined 27 percent in the second quarter, more than double the 11 percent drop for soybeans.
"Oilseed prices are consolidating," Paris-based farm adviser Agritel wrote in a market comment. "With the current ratio between soybean and corn prices, South American growers should tend to favor soybean planting at the expense of corn."
Soybeans for November delivery slipped 0.6 percent to $13.5075 a bushel by 6:23 a.m. on the Chicago Board of Trade, after earlier climbing 0.5 percent. Soybeans rose for the fifth straight week last week, the best run since May, adding 12 percent since the end of July as dry weather and heat intensified in the Midwest.
August weather conditions indicate a large cut to expected production, Goldman Sachs Group Inc. said yesterday.
"Soybeans continue to trade weather as persistent dry conditions trim U.S. crop yields," Profarmer Australia, a unit of NZX Ltd., said in a report dated yesterday. "The expectation is U.S. soybean yield estimates will be reduced."
The USDA will publish new production estimates at noon in Washington. The agency cut its ratings for the soybean crop for four straight weeks, with 52 percent of fields in good or excellent condition as of Sept. 8, down from 64 percent that received the top ratings in early August.
Corn for December delivery dropped 0.6 percent to $4.6975 a bushel. The price has slumped 33 percent this year on expectations that the U.S. harvest will rebound to an all-time high after drought hurt last year’s crop.
The USDA may lower its corn output forecast to 13.6 billion bushels, the Bloomberg survey showed. While that’s 0.9 percent below the August outlook, it would still be a record crop.
Wheat for delivery in December fell 0.3 percent to $6.4625 a bushel in Chicago. Milling wheat for November delivery traded on NYSE Liffe in Paris dropped 0.3 percent to 187.50 euros ($249.23) a metric ton.
"Most traders are waiting for the next USDA report," Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, wrote in a note to clients.