Soy hits fresh 5-month low as market braces for USDA data

CHICAGO: US soybean futures fell to a new five-month low on Friday on expectations that federal crop forecasters will predict a sharp increase in plantings from last year.

Wheat and corn futures inched higher, consolidating above recent multi-week lows.

Traders in all the markets were waiting for the US Department of Agriculture (USDA) to release estimates, the first based on survey of growers, of what domestic farmers will plant this spring. The estimates are due at 11 a.m. CDT (1600 GMT), along with data on US grain stocks as of March 1.

Analysts on average expect a 5.7 percent jump in soybean acres from a year ago, to 88.214 million acres, according to a Reuters poll. They predict 3.2 percent and 8.0 percent declines in corn and wheat seedings, to 90.969 million acres and 46.139 million acres, respectively.

"The real fireworks, if there are going to by any, will come at 11:00 am when the USDA reports come out," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

Chicago Board of Trade most-active May soybeans were down 6-1/4 cents at $9.56-3/4 a bushel by 10 a.m. CDT. The contract earlier touched a new low since mid-October at $9.55-1/2. On a quarterly basis, soybeans have dropped about 4 percent, giving up most of the gains made in the last quarter of 2016.

Poor weather during the spring or summer would be needed to spark a strong rally in the market due to large plantings, traders said.

"Without a significant weather story, there's simply too many acres in play to argue from a bullish fundamental perspective," aid Kevin Van Trump, chief executive officer of Missouri consultancy Farm Direction.

Most-active CBOT wheat was up 1 cent at $4.22 a bushel, while corn added 1-1/4 cents to $3.58-3/4 a bushel.

Analysts expect the USDA to report US corn stocks on March 1 were 8.534 billion bushels, up 9 percent from a year earlier, according to a Reuters poll. Soybean stocks are expected to be up 10 percent at 1.684 billion, and wheat stocks are seen up about 19 percent at 1.627 billion.

Low prices for the crops have encouraged farmers to keep them in storage, rather than selling them to processors or livestock operations.

"It is not out of the question we could see record on-farm reserves given the lack of movement since harvest," said Karl Setzer, risk management team leader for MaxYield Cooperative in Iowa.