CHICAGO: US soybean futures fell to the lowest levels in a year on Tuesday after the US Department of Agriculture raised its estimates of South American crops and domestic soy ending stocks.
Corn futures declined while wheat turned higher as traders covered short positions.
As of 1:04 p.m. CDT (1804 GMT), Chicago Board of Trade May soybean futures were down 3 cents at $9.38-3/4 per bushel after dipping to $9.29-3/4, the lowest spot price on a continuous chart since April 2016.
CBOT May corn was down 1 cent at $3.66 a bushel while May wheat was up 3-1/2 cents at $4.32-1/4 a bushel.
Soybeans extended early declines after the USDA raised its forecast of global soybean stocks at the end of the 2016-17 marketing year to 87.41 million tonnes, from 82.82 million in March and well above an average of trade estimates for 83.91 million.
The figure reflected rising crop estimates of South America's soy harvest. The USDA pegged Brazil's crop at 111 million tonnes, up from 108 million last month. Earlier on Tuesday, Brazil's agricultural statistics agency Conab raised its estimate of the soy crop to 110.2 million tonnes, from 107.6 million in March.
"They pumped up Brazil and Argentina soy production a little higher than what the USDA was expected to do," said Jack Scoville, analyst with the Price Futures Group.
"These are huge numbers. We're kind of figuring out that prices are still a little high," Scoville said.
Corn futures followed soybeans lower, pressured in part by rising estimates of South America's corn output.
On the domestic front, some traders were disappointed that the USDA left its forecast of US 2016-17 corn exports unchanged at 2.225 billion bushels.
"The USDA didn't change any of the (US) export numbers, which is stupid. We're running way ahead of normal on corn exports and way ahead on bean exports," said Roy Huckabay of Linn & Associates, a Chicago brokerage.
Wheat futures turned higher after touching session lows immediately after the USDA's report. Funds hold a large net short position in CBOT wheat futures, leaving the market vulnerable to bouts of short-covering.
Wheat's rally came despite the USDA raising its forecasts of US and global wheat inventories at the end of the 2016-17 marketing year. The government raised its forecast of domestic wheat ending stocks to 1.159 billion bushels, a near 30-year high.
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