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Soybeans hit 3-month lows on yields, technicals

10/02/2012 @ 2:58pm

U.S. soybean futures fell to a three-month closing low Tuesday on improving expectations for the U.S. crop and negative technical signals.

Chicago Board of Trade November soybeans settled down 29 3/4 cents, or 1.9%, at $15.30 1/2 a bushel.

Soybean futures were pressured by anecdotal reports indicating that yields, or bushels harvested per acre, are better in some parts of the Farm Belt than once feared during the severe summer drought.

John Kleist, a senior analyst with Ebottrading.com in McHenry, Ill., predicted that the U.S. Department of Agriculture, in a crop report due next week, could raise its forecast for the national soybean yield this year by 1 bushel an acre to 36.3 bushels. "That changes the ballpark," he said.

Negative technical signals also continued to pressure soybean prices. The combination of factors caused managed funds to continue selling futures and driving prices down, as they have for the last few weeks, traders said.

"To one degree it's still...wringing out the excesses of the previous months," Mr. Kleist said.

Managed funds, including hedge funds, accumulated an extremely large net position during the summer as they bet on higher soybean prices. That net position has shrunk but still remains large. Soybean prices reached an all-time high on Sept. 4.

Goldman Sachs said Tuesday it cut its price forecasts for soybeans because it expects a larger soybean crop, and the USDA reported larger-than-expected soybean inventories last week. Goldman cut its three-month soybean price forecast to $18.75 a bushel from $20, and its six-month forecast to $17.25 from $18.

The USDA on Friday said domestic soybean inventories as of Sept. 1 were 169 million bushels, above the average analyst prediction of 132 million bushels.

Wheat futures fell Tuesday on factors that included improved soil moisture for plantings of winter wheat in the southern Plains. Traders are also concerned about lackluster export demand for U.S. wheat.

CBOT December wheat fell 12 3/4 cents, or 1.4%, to $8.71 1/2 a bushel. Kansas City Board of Trade December wheat fell 14 3/4 cents, or 1.6%, to $8.92 1/4 a bushel. MGEX December wheat fell 13 1/4 cents, or 1.4%, to $9.24 1/4 a bushel.

Corn futures ended mixed, as traders weighed concerns about tight supplies against signs that high prices have already substantially eased demand. A drop in prices last month didn't lead to clear signs of demand recovery, with export sales still lackluster and ethanol production reduced. Prices jumped Friday after the USDA reported smaller-than-expected domestic corn inventories, however.

December corn settled up 1 1/2 cents, or 0.2%, at $7.58 1/4.

Write to Owen Fletcher at owen.fletcher@dowjones.com
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(END) Dow Jones Newswires
October 02, 2012 15:40 ET (19:40 GMT)
DJ U.S. GRAIN AND SOY REVIEW: Soybeans Fall on Better Yield Views->copyright

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