Stunning soybeans

Soybeans extended the biggest slump in five years to the lowest since December 2011 after a U.S. report that showed the country’s farmers will plant more than ever of the oilseed. Corn dropped to a five-month low.

Soybeans (CBOT:ZSN14) will be sown on a record 84.8 million acres in the U.S., up 11% from last year, the U.S. Department of Agriculture reported yesterday. Soybean stockpiles as of June 1 as reported by the USDA were bigger than expected.

Soybeans for November delivery lost 1.2% to $11.4325 a bushel on the Chicago Board of Trade by 7:49 a.m. after earlier dropping to $11.4225, the lowest level for a most-active contract since Dec. 21, 2011. Futures tumbled 5.8% yesterday 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% of the crop was rated in good or excellent condition on June 29, up from 67% a year earlier, the USDA said in a separate report yesterday. The U.S. is the world’s biggest grower.

“The market is now looking at the conditions of the U.S. 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 today.
 

Corn Falls
 

Corn (CBOT:ZCN14) for December delivery fell 1.1% to $4.2075 a bushel, and touched $4.20, the lowest since Jan. 10. Prices dropped 4.9% yesterday, the biggest decline since June 28, 2013.

Futures tumbled 15% in the second quarter, the most since the three months through June 2013, as stockpiles in the U.S. 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 (CBOT:ZWN14) for September delivery fell 0.3% to $5.76 a bushel. Futures dropped 2.7% yesterday to cap a 17% quarterly slump, the biggest such decline since June 2011. Milling wheat for November delivery traded on Euronext in Paris fell 0.3% to 185.25 euros ($253.50) a metric ton.

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