- Agency boosts crop outlook after analysts expected a cut
- Oilseed slump tempered by rally in corn after bullish estimate
The U.S. Department of Agriculture unveiled a surprise soybean forecast for the second straight month, and prices tumbled to a six-year low before closing little changed.
U.S. output this year was forecast at 3.935 billion bushels, and the yield at 47.1 bushels an acre was up 0.4 percent from a month earlier, the government said Friday in a report. Analysts expected a production cut to 3.841 billion bushels. In August, the government projected 3.916 billion. The agency lowered its projection for the domestic corn crop.
“We did not expect the USDA to increase their yield,” Terry Reilly, a senior commodity analyst at Futures International in Chicago, said in a telephone interview. “That caught the trade off guard.”
On the Chicago Board of Trade, soybean futures for November delivery rose less than 0.1 percent to settle at $8.7425 a bushel Earlier, the price dropped as much as 2.4 percent to $8.5325, the lowest for a most-active contract since March 2009.
The market pared losses because of the rally in corn prices and increasing demand for U.S. oilseed exports in the past four weeks, Dale Durchholz, a senior market analyst at Bloomington, Illinois-based AgriVisor LLC, said in a telephone interview.
Corn futures for December delivery rose as much as 3.5 percent after the USDA report.
On Aug. 12, soybeans plunged 6.3 percent, the most in six years, after the USDA unexpectedly raised its crop forecast.
This year, soybeans have dropped 15 percent, while corn has declined 2.5 percent. The U.S. is the world’s biggest grower of the crops.