Soybeans Reach Lowest Since 2011 as Corn Falls on Bigger Supply

Jul 01, 2014 3:37 pm ET

July 1 (Bloomberg) -- Soybeans fell to the lowest since December 2011 as the outlook for record seedings boosted speculation that supplies will be ample in the U.S., the world’s top grower. Corn dropped to a five-month low.

About 84.8 million acres will be sown with soybeans, the most ever and up 11 percent from last year, the U.S. Department of Agriculture said yesterday. Stockpiles tracked by the USDA as of June 1 were 405 million bushels, larger than the 382 million forecast by analysts surveyed by Bloomberg. Corn inventories were also bigger than expected.

“Both corn and beans would increase from a carryout standpoint, and that’s why soy is down so hard today,” Jeff Beal, a consultant for Gulke Group Inc. in Chicago, said in a telephone interview. “It’s all incredibly bearish for beans. It is a freefall.”

Soybean futures for November delivery fell 0.8 percent to close at $11.475 a bushel on the Chicago Board of Trade, after reaching $11.32, the lowest for a most-active contract since Dec. 16, 2011. Prices tumbled 5.8 percent yesterday, the most since July 2009.

About 72 percent of the crop was in good or excellent condition on June 29, up from 67 percent a year earlier, the USDA said in a separate report yesterday.

Corn futures for December delivery fell 0.6 percent to $4.2275 a bushel, after touching $4.17, the lowest since Jan. 10. Prices dropped 4.9 percent yesterday, the biggest decline since June 28, 2013.

Futures tumbled 15 percent in the second quarter, the most in a year, as government-monitored stockpiles in the U.S. reached 3.854 billion bushels as of June 1. The average estimate of 26 analysts surveyed by Bloomberg was 3.723 billion bushels.

Wheat futures for September delivery fell 0.9 percent to $5.725 a bushel on the CBOT. Prices dropped 2.7 percent yesterday to cap a 17 percent quarterly slump, the most since June 2011.

--With assistance from Chanyaporn Chanjaroen in Singapore and Rudy Ruitenberg in Paris.