Soybeans sink on bearish USDA data

11/09/2012 @ 3:09pm

U.S. soybean futures fell on Friday after the U.S. Department of Agriculture forecast a larger-than-expected national soybean harvest.

Chicago Board of Trade November soybean futures, thinly traded ahead of the contract's expiration Wednesday, settled down 47 1/4 cents, or 3.2%, at $14.52 a bushel.

Most active January soybeans fell 44 1/2 cents, or 3.0%, to $14.51 1/4 a bushel.

The USDA, in a monthly crop report, boosted its estimate of soybean output by 3.9% because rains late in the growing season benefited crops in various states.

The USDA estimated the soybean crop will be 2.971 billion bushels, up from its estimate of 2.860 billion last month and above the average prediction of 2.891 billion by analysts in a Dow Jones poll.

The USDA surprised analysts by raising its projection for the national soybean yield to 39.3 bushels per acre from its forecast of 37.8 last month. The new number was significantly higher than the average analyst estimate of 38.2 bushels per acre in a Dow Jones Newswires survey.

The increase in projected soybean yields "is the standout number in today's figures," said Jim Gerlach, president of A/C Trading Co., a commodities brokerage in Fowler, Ind.

The USDA forecasts sparked selling that built on itself as more market participants with bets on higher prices sold futures to exit those positions, traders said.

Corn futures fell slightly as the USDA also raised its forecast for the country's corn harvest this year.

The USDA estimated that farmers will harvest 10.725 billion bushels of corn, up from its estimate of 10.706 billion last month and above the average prediction of 10.629 billion in the Dow Jones Newswires survey. The forecast was a turnaround from months of shrinking projections for the harvest.

The USDA slightly increased its estimate for the national corn yield to 122.3 bushels an acre from 122 bushels a month ago. Analysts had expected a yield of 122.1 bushels.

December corn futures fell 2 1/2 cents, or 0.3%, to $7.38 3/4 a bushel.

Wheat futures fell as the USDA cut its forecast for U.S. exports, resulting in a higher forecast for domestic stocks of wheat on May 31, the end of the crop's marketing year.

The USDA cut its export forecast by 50 million bushels, or 4.3%, to 1.1 billion bushels, and it forecast U.S. ending stocks of wheat will be 704 million bushels, above the 666 million projected by analysts in the Dow Jones Newswires survey.

CBOT December wheat futures settled down 16 cents, or 1.8%, at $8.86 1/2 a bushel. KCBT December wheat fell 14 3/4 cents, or 1.6%, to $9.22 1/4 a bushel. MGEX December wheat fell 8 1/4 cents, or 0.9%, to $9.50 1/2 a bushel.

Write to Owen Fletcher at
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November 09, 2012 16:02 ET (21:02 GMT)
DJ U.S. GRAIN AND SOY REVIEW: Soybeans Fall on Bigger Harvest View->copyright