Soybean futures dip as Brazil drought concerns ease

CANBERRA: Soybean futures edged lower on Thursday as traders eased their concerns that hot, dry weather in top producer Brazil might threaten soybean seeding, while the ongoing US harvest added supply to the market.

Wheat slips from 3-month highs over supply fears

Wheat futures retreated further from three-month highs as strong Black Sea exports offset poor production in Europe. Corn also fell.

Fundamentals

• The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.2% at $10.11-3/4 a bushel, as of 0041 GMT, while CBOT corn fell 0.4% to $4.11 a bushel and wheat slipped 0.4% to $5.73-1/2 a bushel.

• All three contracts hit four-year lows in July or August. They have since benefited from a weakening dollar, which has made US farm goods cheaper for overseas buyers, but prices remain not far from their lows.

• A delayed rainy season in Brazil, the biggest soybean producer and exporter, has depleted moisture levels in large areas of the country, complicating planting.

• However, analysts say the drought won’t become alarming unless it stretches into October, and Brazilian crop agency Conab still projects a bigger crop than last season’s.

• Numerous weather forecasters expect a La Nina weather pattern to develop in the Pacific, which would typically lead to drier weather in South America. But Australia’s weather bureau said that if one forms in the coming months it will be likely be weak and short-lived.

• “The briefer and weaker La Nina forecast mutes some of the bullish concerns (for soybeans),” StoneX analyst Bevan Everett said in a note, adding, “planting is so early that a small delay doesn’t drive acreage losses.” * Meanwhile, the US soy and corn harvests are advancing rapidly and expected to be very large.

• “US harvest pressure should continue to cap any rallies,” said another StoneX analyst Matt Zeller.

• In wheat, FranceAgriMer sharply cut its forecast for French soft wheat exports after a poor crop and said the protein content of France’s grain would be well below long-term averages.

• However, Russian wheat export prices remain low and its exports are expected to remain strong in September, consultancy Sovecon said.