Soybeans fall on USDA crop report

HAMBURG: US soybean futures fell on Tuesday after the US Department of Agriculture (USDA) assessed the condition of the US crop above market forecasts, while corn and wheat also fell.

"Soybeans and corn are being weakened by positive US crop conditions seen by the USDA while the US-China trade war is also undermining soybeans," said Matt Ammermann, commodity risk manager at INTL FCStone.

"Wheat is being seeing spillover weakness from soybeans and corn, along with signs investment funds do not have such a large short position in wheat as some expected."

The Chicago Board of Trade's most active soybean contract was down 0.2 percent at $8.70-1/4 a bushel by 1042 GMT. Chicago soybeans had closed about 2.5 percent down on Monday, partly on concern that the trade dispute between the United States and China will damage US exports.

The most active corn contract was down 0.7 percent at $3.64-1/4 a bushel. Corn markets fell by about 1.6 percent on Monday.

The most active wheat contract was down 1.6 percent at $499-3/4 a bushel, having dropped by about 1.4 percent on Monday.

After the market closed on Monday, the USDA said 71 percent of the US soybean crop was in good-to-excellent condition, slightly above market expectations of 70 percent.

"The USDA weekly condition ratings for soybeans and corn showed the US crops are in an overall decent state with no major reason for concern at this timepoint," Ammermann said. "They are not the best ever crops but they are in reasonable state."

The USDA said 75 percent of the US corn crop was in good-to-excellent condition, matching market expectations. The USDA said 80 percent of U.S spring wheat is in good-to-excellent condition, above average analyst forecasts of 76 percent.

Traders also noted pressure ahead of the USDA's monthly world supply and demand reports on Thursday.

The USDA is expected to begin cutting forecasts for US soybean exports and increasing projected stockpiles as the trade war with top soybean importer China disrupts shipments.

"The US-China trade dispute is dragging on, adding uncertainty to the market," Ammermann said. "The US soybean harvest is expected to arrive in about three months and basically no one knows what China wants to do about its imports."

"Some market participants are also awaiting the USDA world supply and demand report on Thursday to see if estimates of US soybean exports are cut."