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U.S. grains: Soy, corn, wheat slide on prospects for rising stockpiles

CBOT wheat at 10-year low, corn at seven-year low

Harvest equipment stands ready in the Livelong, Sask. area, about 100 km north of North Battleford. (Lisa Guenther photo)

Chicago | Reuters — U.S. corn and wheat futures fell to multi-year lows on Tuesday and soybeans hit a four-week low on expectations for big crops and rising grain supplies, traders and analysts said.

At the Chicago Board of Trade, November soybeans settled down 13-1/2 cents at $9.50-3/4 per bushel and December corn ended down five cents at $3.15-3/4 a bushel (all figures US$). December wheat settled down 4-3/4 cents at $3.92-1/4 a bushel.

Soybeans led the way down as improving U.S. crop ratings fuelled expectations for a bumper harvest. The U.S. Department of Agriculture late on Monday rated 73 per cent of the U.S. soybean crop as good to excellent, up from 72 per cent the previous week and the highest for this time of year in USDA records dating to 1986.

“The crop is getting bigger, with the favourable finishing rains,” said Rich Feltes, vice-president for research with R.J. O’Brien.

The November soybean contract fell below its 200-day moving average this week, a bearish technical signal, and touched a four-week low Tuesday at $9.46-1/2. The sell-off occurred despite a pick-up in U.S. soybean exports that began in late July and is expected to continue into the autumn.

“As recently as four to six weeks ago, the bean narrative was one of strong demand and tightening new-crop soybean stocks. Now, the narrative is one of building stocks,” Feltes said, citing crop ratings and good weather.

U.S. corn ratings are strong as well, with USDA rating 75 per cent of the crop as good to excellent, unchanged from the previous week and the highest for this time of year since 1994.

A big corn harvest should lift U.S. corn inventories, with USDA already projecting stocks to reach 2.4 billion bushels by the end of the 2016-17 marketing year, the most in nearly 30 years.

CBOT front-month corn on Tuesday fell to $3.03-1/2 per bushel, the lowest spot price on a continuous chart since September 2009.

Along with rising supplies, corn faces competition for feed demand from record-large global wheat inventories.

CBOT wheat futures declined for a seventh straight session as the market struggled to define a bottom after the spot contract fell to its lowest in 10 years.

“The wheat market collapse, starting last Friday… was a telltale sign for what could happen in corn and beans,” said Dan Cekander, president of DC Analysis.

“Ample U.S. corn, wheat bean carry-out stocks are forecast for ’16-17,” Cekander said.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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