Soybeans Drop to One-Week Low as U.S. Harvest May Top Forecast

Soybeans fell to a one-week low in Chicago on signs the drought-hit crop in the U.S., the world’s largest grower last year, may exceed a government forecast. Wheat rose.

U.S. soybean output may reach 2.739 billion bushels, INTL FCStone Inc. said yesterday, more than the 2.692 billion estimated by the U.S. Department of Agriculture last month. The oilseed has jumped 44 percent in 2012. While most of the Midwest had below-average rain this year, areas of central Illinois, Indiana and Missouri had double the normal amount in the past week, National Weather Service data show.

“The supply situation perhaps is not directly in line with the hysteria,” said Mike Darby, a former agricultural specialist at the USDA who now runs Mike Darby International Pty Ltd. Australia, an agriculture consulting company. “Traders said they’re not having any problems booking soybeans or corn.”

Soybeans for November delivery declined 0.4 percent to $17.4025 a bushel on the Chicago Board of Trade by 12:50 p.m. London time. Prices touched $17.255, the lowest level since Aug. 29. Futures reached a record $17.89 on Sept. 4 amid concern the worst U.S. drought in half a century will cut global supply.

The USDA is scheduled to release updated crop forecasts Sept. 12.

Wheat Harvests

Wheat for December delivery gained 1.1 percent to $8.775 a bushel after sliding 4.2 percent in the prior four sessions. In Paris, milling wheat for November delivery rose 0.5 percent to 261.25 euros ($329.96) a metric ton on NYSE Liffe.

The world wheat harvest will be about 2 percent lower than previously estimated this year at 663.3 million tons, the United Nations’ Food & Agriculture Organization said today. Output in Russia may slide to 40 million tons, below the total in 2010, when the country’s worst drought in 50 years spurred a 10-month grain-export ban, the FAO said. Harvests may tumble 47 percent in Kazakhstan and 37 percent in Ukraine, a report showed.

“Continued deterioration of cereal crop prospects over the past two months, due to unfavorable weather conditions in a number of major producing regions, has led to a sharp cut in FAO’s world production forecast,” the UN agency said. “Based on the latest indications, global cereal production would not be sufficient to cover fully the expected utilization in the 2012-13 marketing season.”

Corn for December delivery gained 0.5 percent to $7.95 a bushel in Chicago. The most-active contract reached an all-time high of $8.49 on Aug. 10. World output of the grain may fall 20 million tons from 2011 to 864 million tons (34 billion bushels), the FAO said. INTL FCStone predicts the U.S. crop will total 10.607 billion bushels, less than the USDA’s estimate of 10.779 billion.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Whitney McFerron in London at wmcferron1@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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