CANBERRA: Chicago soybean futures on Wednesday hovered above four-year lows as a strengthening dollar made US exports less competitive in a market well-supplied with cheap beans from South America.
Wheat and corn were flat after major supplier Ukraine projected a drop in grain production this year, with both contracts near their lowest levels since 2020 due to ample supply.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was unchanged at $11.45 a bushel by 0302 GMT, but prices have lost about 4% this month and are nearing February’s four-year low of $11.29.
CBOT wheat was also flat at $5.65 a bushel, while corn fell 0.1% to $4.30-3/4 a bushel.
Also weighing on soybeans is an improved weather outlook in the United States that heralds healthy yields, and a drop in the price of palm oil, a competitor for soyoil, Rabobank analyst Vitor Pistoia said.
Rabobank sees CBOT soybeans trading around $11.50 a bushel at year-end, Pistoia said.
The dollar has soared since last week, rising to its strongest level since Nov. 1 against a basket of currencies and making US farm goods costlier for importers.
US suppliers face stiff competition for global export sales from South American corn, soy and Russian wheat. Speculators on the CBOT are betting on lower prices for all three crops and were net sellers again on Tuesday, traders said.
Oilseeds lobby Abiove raised its estimate for Brazil’s 2023 soybean production and its beginning stocks for this year, underscoring ample supply.
Brazil, the world’s biggest soybean exporter, expects a slightly smaller harvest this year, but Argentinian production to likely increase.
Ukraine’s farm ministry, meanwhile, said the country’s grain harvest would likely fall to about 52 million metric tons this year from 58 million tons in 2023, mostly due to a smaller expected sowing area.
Wheat production in Germany and France is also likely to decline this year, according to data and estimates.
But flooding in Russia has not significantly disrupted the work of agricultural companies, the country’s agriculture minister said.
Russia is the world’s top wheat exporter.
In corn, the estimate for the second harvest in Parana state, the second-largest producer in Brazil, will likely be cut in the next revision, an official at crop agency Deral said.
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