Soybeans lost over 20 cents on Tuesday with a sharply lower move in soybean meal and soybean oil.
November soybeans fell below the psychological $10 level in the process.
What drove the sharp selloff?
Dave Chatterton with Strategic Farm Marketing says the market saw profit taking after Monday’s crop ratings came in above expectations.
“Crop ratings typically decline this time of year, we got a steady print and those ratings have continued to run well above historical levels for mid-September,” he says.
That fed fears that USDA could potentially raise yield in the September Supply and Demand Report from the record projections in August.
He says that doesn’t match up with the early trade guesses which only show fractional changes but it was at least being bantered around by the trade.
Chatterton says the lack of flash export sales of soybeans to China was also negative for the market.
“We’ve had China in the last few weeks as a consistent buyer but on a very small basis, not the 2 million ton weeks that we like to see,” he explains.
Corn followed soybeans lower but at least maintained above $4 in the December contract.
He says, “With the foliar diseases in corn very prevalent the idea in farmers minds is its taken the top end yield off. That doesn’t necessarily mean yields go down on Thursday but the market feels like it has probably seen the peak number from USDA.”
Chatterton says the market is waiting however for the cue from USDA to put in the seasonal low.
