CANBERRA: Soybean futures dropped on Thursday on a firmer dollar and easing concerns that hot, dry weather in top producer Brazil will threaten the oilseed’s sowing process, while the ongoing US harvest added supply to the market.
Wheat futures retreated further from three-month highs as strong Black Sea exports offset poor production in Europe. Corn also fell as the US harvest ramped up.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.6% at $10.08 a bushel, as of 0210 GMT, while CBOT corn fell 0.6% to $4.10-1/4 a bushel and wheat slipped 0.7% to $5.71-1/2 a bushel.
All three contracts hit four-year lows in July or August amid plentiful supply. They have since benefited from a weaker dollar, which made US farm goods cheaper for overseas buyers, but prices remain not far from their lows and the greenback rose sharply on Thursday.
“Soy is still oversupplied globally,” said Ole Houe at IKON Commodities in Sydney. “We have 35 million tons more soybean production this year than last year and stocks are up.” With US soy and corn harvests advancing rapidly and expected to be very large, soybean futures are likely to fall towards last month’s low of 9.55 a bushel, Houe said.
Analysts and traders say drought in top soy producer Brazil won’t become alarming unless it stretches into October, and Brazilian crop agency Conab is still projecting a bigger crop than last season’s. Numerous weather forecasters expect a La Nina weather pattern to develop soon, which would typically make South America drier. But Australia’s weather bureau said if one forms in the coming months it will be likely be weak and short-lived.
“The briefer and weaker La Nina forecast mutes some of the bullish concerns (for soybeans),” StoneX analyst Bevan Everett said in a note. “Planting is so early that a small delay doesn’t drive acreage losses,” he said.
In wheat, FranceAgriMer cut its forecast for French exports after a poor crop and said the protein content of France’s grain would be well below long-term averages. However, Russian wheat export prices are still low and its exports are expected to remain strong in September, consultancy Sovecon said.
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