U.S. grains: Soy falls as Brazil crop forecasts grow

Chicago | Reuters –– U.S. soybean futures fell one per cent on Friday, pressured by expectations for a huge crop in Brazil, the world’s top exporter of the oilseed, traders said.

Soybeans weakened early in Friday’s session on a round of technical selling after failing to push through their weekly high during the overnight trading session. Fresh forecasts for a bumper harvest in Brazil pushed prices to session lows.

Corn and wheat futures also ended lower, weighed down by abundant global supplies and end-of-week profit taking. Both corn and wheat posted weekly gains despite Friday’s setback.

Wheat faced additional headwinds from a benign weather outlook for crop development, adding to concerns about strong harvests in the coming months providing additional supplies for an already robust world stockpile.

“The strong cold is set to return to the Black Sea Region next week, but sufficient snow cover should protect the wheat in the area from winterkill,” said Matt Gallik, mark analyst at CHS Hedging.

Chicago Board of Trade soft red winter wheat for March delivery ended down 4-1/4 cents at $4.30-1/4 a bushel (all figures US$).

“There are no major weather scares at present,” said David Sheppard, managing director of UK merchant Gleadell.

For the week, wheat futures rose 2.1 per cent. They have risen for five of the last six weeks.

CBOT March corn was 2-1/4 cents lower at $3.65-1/4 a bushel. Corn futures rose 0.6 per cent this week.

CBOT March soybeans were down 10-1/4 cents at $10.27 a bushel. Soybean futures fell 2.2 percent this week, their second straight weekly loss.

Private analytics firm Informa Economics on Friday forecast the Brazil soybean harvest at 106.5 million tonnes, up from its previous estimate of 105 million. Brazilian analysts Safras & Mercado pegged the crop at 107.09 million tonnes.

Farmers in Brazil were already ahead of their typical harvest schedule and their progress is expected to curb demand for U.S. soybeans earlier than usual.

“We don’t think demand for U.S. (soy)beans will fall away completely. Chinese demand is clearly very strong. But the sun will probably soon set on the big U.S. export numbers the market has grown accustomed to,” said analyst Tobin Gorey of Commonwealth Bank of Australia.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Nigel Hunt in London.

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