Soybeans Fall to Lowest Since 2010 on Record U.S. Crop

Soybeans fell to the lowest since 2010 after a government report showed supplies will be bigger than forecast in the U.S., the world’s top grower.

Farmers will harvest a record 3.816 billion bushels this year, compared with 3.8 billion (103.4 million metric tons) estimated in July, the U.S. Department of Agriculture said today in a report after completing its first surveys of farmers and fields. Analysts surveyed by Bloomberg expected 3.815 billion.

Rain and milder weather created ideal Midwest growing conditions, and prices fell 6.5 percent in July, a third straight loss. Bigger supplies are helping to keep global food inflation in check, with the United Nations reporting prices fell last month, the fourth consecutive drop

“Today’s report solidifies the growing bearish outlook, not only in the U.S., but also in the world,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “Soybeans are overvalued relative to the other grain markets and have the most downside price risk. We have burdensome supplies.”

Soybean futures for November delivery fell 1.3 percent to close at $10.595 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $10.43, the lowest for a most-active contract since Oct. 4, 2010.

Domestic reserves before the start of the 2015 harvest will be 430 million bushels, up from this year’s projection of 140 million, the USDA said. The average estimate of 30 analysts surveyed by Bloomberg was 406 million bushels.

World Stockpiles

World inventories before the start of the 2015 Northern Hemisphere harvests will rise 28 percent to a record 85.62 million tons, from 67.09 million predicted this year, the USDA said. Average U.S. yields will reach an all-time high of 45.4 bushels an acre, the agency said.

Rising supplies will cut feed costs for producers of poultry, hogs and cattle, making it easier to increase meat production after beef and pork in wholesale markets jumped to records this year. Margins for Archer-Daniels-Midland Co. (ADM) and Bunge Ltd. (BG) will probably improve with more oilseed to process and export.

Corn futures rose, erasing declines, as the USDA said domestic inventories will reach 1.808 billion bushels before the start of the 2015 harvest. That compares with the average analyst estimate of 2.034 billion. U.S. production estimated by the agency at a record 14.032 billion bushels was also smaller than forecast.

Yield Estimate

The government’s outlook for yields at 167.4 bushels an acre compares with 170.2 bushels in the Bloomberg survey.

“Corn was not as bearish as expected,” Sterling Smith, a futures specialist at Citi Futures in Chicago, said in a telephone interview. “There is the potential for this yield number to be pushed higher again.”

Corn futures for December delivery rose 0.2 percent to $3.69 a bushel. Earlier, the price fell as much as 2.8 percent. The grain has dropped 20 percent in the past 12 months.

A measure of ears on corn crops in 10 states indicate a record high, the USDA said today. While most plants in the Midwest are designed to produce just one 6-inch ear with about 500 kernels, some are sprouting a second one.

World wheat inventories by the end of May will rise to 193 million tons, a three-year high, the USDA said. That compares with last month’s estimate of 189.54 million.

Global output will increase to a record 716.1 million tons from 705.17 million forecast last month. The agency boosted crop projections for Russia, Ukraine and China.

Wheat futures for December delivery dropped 2 percent to $5.5125 a bushel, the biggest drop since July 29.

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net; Megan Durisin in Chicago at mdurisin1@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Patrick McKiernan

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