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Markets

Soybeans set for 1st monthly drop since mid-2020 on better US planting prospects

  • The US soybean crush likely fell to 4.952 million short tons in February, or 165.1 million bushels, according to the average forecast of nine analysts surveyed by Reuters ahead of a monthly USDA report.
Published March 31, 2021

SINGAPORE: Chicago soybean futures edged higher on Wednesday but the market was poised for its first monthly decline since mid-2020 on expectations of higher US planting and improved weather in South America.

Corn was set for a monthly drop for the first time in eight months, while wheat has dropped almost 9% this month after closing marginally lower in February.

"The USDA's (US Department of Agriculture) planting prospects report tonight is perhaps a factor in the fall," said Tobin Gorey, director of agriculture strategy, Commonwealth Bank of Australia.

"Traders would have been less willing to accumulate futures with that report looming."

The most-active soybean futures on the Chicago Board of Trade (CBOT) were up 0.2% at $13.70 a bushel by 0309 GMT. Soybeans were down 2.4% so far in the month, after gaining for nine consecutive months.

Corn was on track for a monthly drop after rallying since August and wheat was set for its biggest monthly slide since February 2019.

The agricultural markets are bracing for Wednesday's USDA planting intentions and quarterly grain stocks reports, which have a history of rattling the markets.

Analysts on average expect the USDA to project expanded plantings of US corn and soybeans in 2021 versus last year, while March 1 stocks of corn, soy and wheat were seen as the lowest in several years.

China's most-active corn futures on the Dalian Commodity Exchange fell more than 1.5% in early trade before recovering.

The decline this week came as farmers sold off stocks ahead of a new crop planting and as processing and feed companies sat on ample supply, said Meng Jinhui, an analyst at Shengda Futures.

The US soybean crush likely fell to 4.952 million short tons in February, or 165.1 million bushels, according to the average forecast of nine analysts surveyed by Reuters ahead of a monthly USDA report.

Estimates ranged from 164.0 million bushels to 170.0 million bushels, with a median of 164.4 million bushels.

Commodity funds were net sellers of CBOT corn, soyoil, soybean and wheat futures contracts on Tuesday and were net even in soymeal futures, traders said.

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