U.S. grains: Soy down on harvest, worries about biodiesel

Chicago | Reuters — U.S. soybean futures fell to a one-week low on Tuesday on technical selling combined with better-than-expected yield reports from the Midwest, analysts said.

Wheat and corn futures followed the weak trend, with wheat retreating after climbing to a one-month high.

Chicago Board of Trade November soybeans settled down 7-3/4 cents at $9.63-1/2 per bushel (all figures US$). CBOT December wheat ended down 1/4 cent at $4.53-3/4 a bushel and December corn fell 1-1/2 cents at $3.52-1/4.

Soybeans sagged a day after the November contract dropped and closed below its 200-day moving average. The U.S. soy harvest is expanding, early yield reports have been better than some feared and cash bids for soybeans at the U.S. Gulf export terminal have fallen sharply over the last week.

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“Building harvest pressure and ongoing reports of higher-than-expected yields are weighing on the soy complex,” Karl Setzer, analyst with the MaxYield Cooperative, wrote in a note to clients.

“Trade is starting to feel more comfortable with the USDA yield estimate of 49.9 bpa (bushels per acre),” Setzer said.

A weekly U.S. Department of Agriculture report showed the U.S. soybean harvest was 10 per cent complete as of Sunday, while 11 per cent of the U.S. corn crop had been harvested.

The progress figures fell below average trade estimates in a Reuters poll, but dry weather was forecast for this week in most of the U.S. Midwest, which should speed fieldwork.

Additional pressured stemmed from declines in soyoil futures, which sagged after the U.S. Environmental Protection Agency said it was seeking comment on a proposal to reduce biodiesel blending requirements into the domestic fuel supply. Soyoil is the primary feedstock for soy-based biodiesel fuel.

CBOT wheat turned down after the December contract reached $4.60-3/4, topping $4.60 for the first time since mid-August, but failed to attract follow-through buying.

Wheat was underpinned by short-covering and positioning ahead of USDA’s small grains and quarterly stocks reports, both due on Friday. Analysts surveyed by Reuters expect the government to lower its estimate of U.S. 2017 spring wheat and all-wheat production.

Corn ticked down, with investors also squaring positions ahead of USDA’s quarterly stocks report. The average trade estimate of U.S. Sept. 1 corn stocks was 2.353 billion bushels, which would be the largest Sept. 1 stocks since 1988, if realized.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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