US MIDDAY: soyabeans fall after USDA raises global stocks view
February 09, 2013
US soyabean futures tumbled early on Friday after the US Department of Agriculture raised its forecast for global supplies at the end of the September-to-August marketing year above trade expectations, as a cut to Argentina’s crop was offset by a rise in Brazil’s.
Corn pared earlier gains on spillover pressure from sinking soyabeans and as the government raised its US and global ending stocks outlook by more than expected as high prices blunted demand for the grain. Wheat climbed on a surprise drop in the US ending stocks forecast, but struggled to hold the gains amid spillover pressure from corn and soya. “This US soyabean stock number is not that big of a surprise … Global stocks coming in at a little over 60 (million tonnes), that’s actually a little bit bearish, and the market’s reacting to that,” said Sterling Smith, futures specialist with Citigroup.
USDA trimmed its US soyabean end-of-season stocks outlook to 125 million bushels, from 135 million a month ago, but raised its global ending stocks view 1.1 percent to 60.12 million tonnes after a million-tonne drop in Argentina’s crop was offset by Brazil’s million-tonne gain.
“That leaves the soyabean market feeling a bit bearish,” Smith said. Chicago Board of Trade March soyabeans fell 28 cents, or 1.98 percent, to $14.58-3/4 per bushel by 1:06 pm CST (1906 GMT) in the steepest drop for a spot contract in 3-1/2 weeks. Losses accelerated as the contract fell below its 100-day moving average of $14.66-1/4. Spot soyabeans were poised for the first weekly decline in five weeks. CBOT March corn fell 1-1/4 cents to $7.09-1/2 a bushel. The contract closed lower in each of the past five session and was set to end the week down 3.5 percent.
CBOT March wheat was 2 cents higher at $7.58 a bushel after earlier trading as high as $7.70-3/4, aiming for a third straight weekly decline. An unexpected cut to projected US wheat carryout was viewed as the bullish surprise in the report, but wheat futures struggled to hold on to earlier gains.
USDA said the stockpile of US wheat at the end of the marketing year on May 31 will shrink to 691 million bushels, down from its previous forecast for 716 million bushels and the smallest in four years. “That was a bullish kick in the pants by lowering carryout instead of increasing it for wheat. Traders were looking for a little build (in inventories) and instead the USDA added some feed demand,” said Jim Gerlach, president of A/C Trading.
The market took USDA’s adjustments to the corn balance sheet in stride as increases in US and world ending stocks and a cut to US exports had been expected. Investors’ attention will likely return to South American weather next week. Rains forecast for dry areas of Argentina may help stem recent corn and soyabean yield losses. Drier conditions will be needed in Brazil, where rains have stalled some early harvest activity and threatened to delay export loadings.