Soybeans fell the most in 19 months on speculation that planting in the U.S. will accelerate as weather turns warmer and drier. Corn and wheat also declined.
The Midwest growing region will be mostly dry until at least May 8, and higher temperatures early next week will help dry out wet soils so farmers can seed crops, Commodity Weather Group said in an e-mailed report today. Farmers are just starting to sow soybeans, and timely planting means output may rise 21 percent to a record, according to Jefferies Bache LLC.
“The improved planting weather increases the outlook for a record crop,” Anne Frick, a senior vice president at Jefferies Bache in New York, said in a telephone interview. “The market is likely to be facing much lower prices” when U.S. farmers begin harvesting in September, Frick said.
Soybean futures for July delivery slid 3.4 percent to close at $14.61 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop for a most-active contract since Sept. 17, 2012. Before today, the oilseed rose 17 percent this year as U.S. inventories before this year’s harvest were projected at the lowest since at least 1964.
This is the first sign of favourable weather conditions in the USA this year, given the severe drought in California and Texas. Today’s news of improved planting conditions caught the grain markets by surprise and led to the unwinding of some long hedges today, as you will see in the chart review below.Back to top