Grain futures lose ground, soybeans declines for a second day amid ample supply

Grain futures declined on Tuesday, soybeans edged lower for a second day as the US Department of Agriculture raised its forecasts for global output and stockpiles.

On the Chicago Board of Trade, soybeans futures for settlement in March fell by 0.23% to trade at $13.2213 per bushel by 15:34 GMT. Prices touched a session high at $13.2363 per bushel, while day’s low stood at $13.1262 per bushel. Yesterday, prices touched $13.3988 per bushel, the strongest level since December 23. The oilseed settled last month 0.45% lower, after it lost 8.5% in 2013.

The US Department of Agriculture reported yesterday that global soybeans inventories before the Northern Hemisphere harvest this year may reach 73.01 million metric tons, up from Januarys estimates of 72.3 million tons. Meanwhile, global production is projected to reach 287.69 million tons, in comparison with 286.83 million tons predicted in the previous month.

“The USDA report was bearish for oilseed prices, raising fears the recent rally may have run out of fundamental support,” said today Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, cited by Bloomberg.

Weather forecasting models also pressured soybeans prices as showers later this week were expected to snap the recent prolonged hot and dry period in Brazil, the largest soybeans exporter, easing stress on the crop.

DTN.com reported on February 11 that the extreme heat and dryness in southern Brazil will continue to stress filling soybeans for two more days, after which showers and more seasonal temperatures may develop. The showers will ease some stress on soybeans, but according to the website, significant amounts of rainfall will be needed to prevent further stress to the crop.

Meanwhile, soybeans and corn producing regions in central Argentina will benefit from adequate to surplus soil moisture, except for some areas where local flooding already occurred. According to the website, 93% of the soybeans crop was reported to be in good to excellent condition.

Elsewhere on the grains markets, corn futures for March delivery traded at $4.3813 a bushel by 15:42 GMT, losing 0.97% for the day. Futures hit a session high at $4.4388 per bushel, while day’s low was touched at $4.3738 per bushel.

The grain increased 3.05% last month, marking the first monthly advance since May. Corn lost nearly 40% in 2013, the steepest annual drop on record amid expectations the global output will surge to 966.9 million tons in 2013-2014 season, boosted by record production in the US, the world’s top producer.

Wheat down as well

On the Chicago Board of Trade, wheat futures for settlement in March lost 0.18% to trade at $5.8413 per bushel by 15:45 GMT. Prices jumped to a session high of $5.8838 per bushel, while day’s bottom was touched at $5.8288.

The grain settled last week 4.1% higher, the biggest gain since the period ended September 27. However, wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.

DTN’s February 11th forecast called for another surge of cold conditions over the Midwest, with the pattern moderating somewhat later in the week. The expected storm will track across the most eastern and southern parts of the region, likely remaining east and south of the Midwest producing areas.

Meanwhile, the website reported that the cold weather trend over the Southern Plains early this week, will give way to warmer conditions late in the week. The warmer weather may favor the dormant wheat crop, but will also melt the protective snow cover.