Soybean futures shed Friday gains
U.S. soybean futures fell Monday, shedding Friday's gains, as traders focused on greater-than-expected supply outlooks.
Soybeans for November delivery dropped 40 3/4 cents, or 2.6%, to $15.60 1/4 a bushel at the Chicago Board of Trade.
Soy futures are trading at three-month lows, buffeted by a seasonal increase in harvest supplies and a government report Friday that showed larger inventories at the end of the latest crop year than analysts expected.
Soybeans had climbed 2% on Friday, largely due to a sharp rally in corn prices, even though the U.S. Department of Agriculture said in a quarterly report Friday that domestic soybean inventories totaled 169 million bushels on Sept. 1, the start of the 2012-13 marketing year. That was above the average analyst forecast of 132 million bushels in a Dow Jones Newswires survey.
Traders on Monday appeared to take a second look at a USDA report that contained bearish numbers.
"Friday, we traded [the U.S. Department of Agriculture]'s report for corn, while today we're going back and trading the report for the beans," said Mike Zuzolo, president of advisory firm Global Commodity Analytics and Consulting in Lafayette, Ind.
Soybean futures have fallen 12% since soaring to a record closing high of $17.71 a month ago during a historic U.S. drought. The oilseed has slipped since then due to the views of some traders that the market had become overheated. In addition, anecdotal reports indicate that yields, or bushels harvested per acre, are better in some reasons of the Farm Belt than once feared, traders said.
Friday's higher-than-expected supply figures, as well as improved perceptions of yields for the current harvest, suggest that the USDA next week may raise its forecast for inventories a year from now, traders said. The USDA will release its monthly report on crop supplies and demand on Oct. 11.
On Monday, soybean futures were also pressured by profit-taking and moves by managed funds to exit bullish bets to curb risk.
"Cooler heads usually prevail after report days are over," Matt Zeller, an analyst with agricultural-advisory firm INTL FCStone, said of Monday's session. "It's no different today, as the trade used the weekend to decide that beans had no reason to break a bearish trend."
Wheat futures also fell Monday, dropping about 2%, as traders struggled to find justification for the market's strong gains Friday other than the nearly 6% jump in corn futures.