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U.S. grains: Soybeans, wheat fall after USDA pegs bigger supplies

U.S. corn output pegged at 14.03B bushels, below expectations

Reuters — Soybean futures slid on Tuesday after the U.S. Department of Agriculture projected that domestic supplies of the oilseed would be bigger than expected at the end of the next marketing year.

Chicago wheat futures were pressured by the department’s higher view on global stocks, while corn futures turned higher after USDA estimated lower-than-expected yields.

USDA estimated U.S. 2014-15 soybean ending stocks at 430 million bushels, surpassing trade expectations of 414 million bushels.

Aspects of the report will keep soybean prices on the defensive, Mike Zuzolo, president of Global Commodity Analytics, said in a report.

“But I would suggest not for long. Maybe by the end of this week, the trade will feel as though they have supplies factored in.”

Chicago Board of Trade November soybean futures fell as much as 2.8 per cent before paring losses and ending down 13-3/4 cents, or 1.3 per cent, at $10.59-1/2 a bushel (all figures US$).

Analysts said soybeans also were under pressure from rainfall in growing regions this week. The favourable weather followed USDA’s report on Monday of 70 per cent good-to-excellent ratings for soybeans as of Aug. 10, down one percentage point from a week earlier.

USDA projected U.S. soybean production of 3.82 billion bushels, close to trade expectations.

December corn futures fell to a contract low but then rallied, finishing up 3/4 of a cent, at $3.69 a bushel.

USDA forecast U.S. corn production of 14.03 billion bushels, which would be a record high, but slightly below trade expectations.

“The corn report was not catastrophically bearish so that was a victory for at least the bull,” said Jerrod Kitt, analyst at The Linn Group.

Chicago Board of Trade September wheat futures dropped for a fourth straight session, paring losses in late trading to close down 8-1/2 cents, or 1.6 per cent, at $5.38 a bushel.

USDA nudged its 2014/15 world wheat ending stocks forecast to almost 193 million tonnes, above expectations.

While concerns about tensions between Russia and Ukraine, both major wheat exporters, rallied the market last week, U.S. supplies are now under pressure from aggressive export competition.

Consultancy UkrAgroConsult revised its outlook for Ukraine’s grain exports in the 2014-15 season 2.5 per cent higher to 32.5 million tonnes on Tuesday.

— Rod Nickel is a Reuters correspondent based in Winnipeg. Additional reporting for Reuters by Julie Ingwersen and Mark Weinraub in Chicago and Ros Krasny in Washington, D.C.

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