Soybeans extended the biggest slump in five years to the lowest since December 2011, after a US report showed that the country’s farmers will plant the largest area ever with the oilseed. Corn dropped to a five-month low.
Seedings in the US will reach a record 84.8 million acres, up 11 per cent from a year earlier, the US Department of Agriculture reported yesterday. Soybean stockpiles as of 1 June, as reported by the USDA, were bigger than expected.
Soybeans for November delivery lost 0.7 per cent to $11.495 a bushel on the Chicago Board of Trade after dropping to $11.465, the lowest level for a most-active contract since 21 December 2011. Futures tumbled 5.8 per cent for the biggest drop since July 2009.
'There was nothing, nothing at all, in the USDA’s plantings and stocks reports that was even modestly, tacitly supportive of grain prices,' economist Dennis Gartman wrote in his newsletter. 'Everything was stunningly bearish.'
Soybean inventories were 405 million bushels at the start of June, larger than the 382 million estimated by analysts in a Bloomberg survey. About 72 per cent of the crop was rated in good or excellent condition on 29 June, up from 67 per cent a year earlier, the USDA said in a separate report yesterday. The US is the world’s biggest grower.
“The market is now looking at the conditions of the US crop, which is quite good as well, and started to build in some large expectations for new crop,” Paul Deane, an analyst at Australia & New Zealand Banking Group Ltd, said by phone from Melbourne.
Corn Falls
Corn for December delivery fell 0.3 per cent to $4.24 a bushel, and touched $4.21, the lowest since 21 January. Prices dropped 4.9 per cent yesterday, the biggest decline since 28 June 2013.
Futures tumbled 15 per cent in the second quarter, the most since the three months through June 2013, as stockpiles in the US reached 3.854 billion bushels, following record production last year, the USDA said. The average estimate of 26 analysts surveyed by Bloomberg was 3.723 billion bushels.
Wheat for September delivery fell 0.3 per cent to $5.7575 a bushel. Futures dropped 2.7 per cent yesterday to cap a 17-per-cent quarterly slump, the biggest such decline since June 2011. Milling wheat for December delivery traded on Euronext in Paris fell 0.1 per cent to €185.50 ($254) a metric tonne.
Bloomberg News, edited by ESM
