Soybeans ease; lower Argentina output estimate caps decline

Chicago soybean futures ticked lower on Wednesday, giving up some of the last session’s gains, although the market was supported by the U.S. government’s estimate of lower output in key supplier Argentina.

Wheat rose slightly on concerns over dryness curbing U.S. winter crop yield potential.

“A jump in Brazilian production partially offset the sharp drop in Argentine production,” commodities research firm Hightower said.

The most-active soybean contract on the Chicago Board of Trade (CBOT) lost 0.2% to $14.94-1/2 a bushel, as of 0135 GMT. Wheat gained 0.2% at $6.75-1/4 a bushel and corn fell 0.2% to $6.49-3/4 a bushel.

Soybean production in Argentina will fall to a 23-year low and corn production to a five-year low, smaller than previously thought, as a crop-wasting drought decimated fields in the key South American producer, the U.S. government said on Tuesday.

Argentina’s soybean harvest was pegged at 27.00 million tonnes and the corn crop at 37.00 million tonnes, according to the U.S. Department of Agriculture’s monthly World Agricultural Supply and Demand Estimates report.

Argentina has endured severe drought while rival corn and soybean exporter Brazil has seen more favourable conditions.

In the United States, traders have been grappling with contrasting weather, with early spring planting slowed by damp, cold conditions and some winter wheat crops strained by drought.

Australian wheat plantings are set for a strong start as better-than-expected rains in parts of the country’s grain growing regions have improved soil moisture, traders and analysts said.

After three years of all-time high wheat production, Australian farmers have started planting the crop this year amid forecasts of El Nino weather, which typically brings dry weather across large parts of the country.

No ships were inspected on Tuesday under the Ukraine Black Sea grain deal “as the parties needed more time to reach an agreement on operational priorities,” the United Nations said, adding that routine inspections were due to resume on Wednesday.

Commodity funds were net sellers of CBOT corn and wheat futures contracts on Tuesday, traders said. Funds were net buyers of soybeans, soymeal and soyoil futures, traders said.

Tags: Market, Argentina, harvest, Brazil, estimate, soybean, Production, wheat, crop, yield, futures