Soybeans Fall to Four-Year Low on Big Pod Tally by Crop Tourists

Aug 20, 2014 4:54 pm ET

Aug. 20 (Bloomberg) -- Soybean futures fell to the lowest in almost four years as bankers, analysts and grain buyers trudge through U.S. Midwest fields, tallying pods that signal a bumper crop. Corn and wheat dropped.

Reports from the first three days of the annual Pro Farmer Midwest Crop Tour show higher soybean counts in Illinois, Ohio, Indiana, Iowa and South Dakota. Those five states accounted for 47 percent of the nation’s production last year, government data show. This year’s crop is expected to rise to a record 3.816 billion bushels, the U.S. Department of Agriculture said last week.

“Traders have been bearish soybeans all along, but maybe worried about things going down too fast, too far,” Arlan Suderman, a senior market analyst at Water Street Solutions Inc. in Peoria, Illinois, said in a telephone interview. “The crop tour is giving them the confidence that the pods are out there.”

Soybean futures for November delivery fell 1.4 percent to close at $10.38 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop for a most-active contract since Aug. 1. Earlier, the price touched $10.35, the lowest since Sept. 16, 2010. The oilseed has declined 20 percent this year.

Illinois, Iowa

Preliminary results from field inspections today showed pod counts up 40 percent from last year in Illinois, the top state grower. The tally in Iowa, the second-largest producer, jumped 38 percent.

Rain will reach the northwestern and eastern Midwest in the next five days, aiding crops, MDA Weather Services in Gaithersburg, Maryland, said today in a report.

Field observations show “the record-breaking potential of this season’s crop,” Chris Gadd, an analyst at Macquarie Group Ltd., said in a report today after the bank completed its own Midwest tour last week. “Corn and soybean prices are likely to weaken into harvest if the current positive weather picture remains the same.”

Money managers held bearish bets in soybean futures and options in the five weeks through Aug. 12, the longest run in eight years, U.S. Commodity Futures Trading Commission data show.

Soybean-meal futures for December delivery dropped 2.4 percent to $344.20 for 2,000 pounds, the biggest drop since June 30. The price of the livestock feed has dropped 17 percent this year. Trading was 69 percent above the average in the past 100 days, according to data compiled by Bloomberg.

Soybean Oil

Soybean-oil futures for December delivery rose 0.6 percent to 33.22 cents a pound. Earlier, the price touched 32.76 cents, the lowest since March 31, 2009. The commodity has dropped 15 percent this year.

Corn futures for December delivery fell 1.3 percent to $3.675 a bushel. The price has tumbled 30 percent since reaching an eight-month high of $5.2425 on April 9.

Yields were estimated higher in Iowa and Illinois and lower in South Dakota, crop tour samples showed. U.S. output will rise to a record 14.032 billion bushels this year, the USDA says.

Wheat futures for December delivery fell 1.5 percent to $5.50 a bushel. The price has dropped 9.1 percent this year.

--With assistance from Jeff Wilson and Lydia Mulvany in Chicago, Whitney McFerron in London and Phoebe Sedgman in Melbourne.