Soybeans Lead Drop in Agricultural Commodities After USDA Report

Soybeans fell in Chicago, extending the biggest drop in almost three months and leading farm commodities lower after the U.S. government raised its outlook for world inventories of the oilseed.

Global soybean stockpiles will be 60.1 million metric tons before this year’s Northern Hemisphere harvest, more than the 59.5 million estimated last month on higher output in Brazil, the U.S. Department of Agriculture said Feb. 8. Analysts had expected inventories to fall to 59.1 million tons, a Bloomberg survey showed.

“People expected a bigger drop in Argentina, so that disappointed, and the USDA forecast higher-than-expected production in Brazil,” Antoine Liagre, an oilseeds analyst at Bourges, France-based farm adviser Offre et Demande Agricole, said by phone. “The result was an unexpected outlook for higher world stocks.”

Soybeans for delivery in March slid 1.4 percent to $14.315 a bushel on the Chicago Board of Trade by 12:53 p.m. Paris time. Prices reached $14.2925, the lowest level since Jan. 25, after retreating 2.3 percent by the close on Feb. 8, the largest decline since Nov. 12. The oilseed headed for a fourth retreat today, which would match a streak ended Jan. 11.

The harvest in Brazil, the biggest grower, will climb to a record 83.5 million tons, against last month’s forecast of 82.5 million, the USDA said. Farmers in Argentina will reap 53 million tons this marketing year, below 54 million estimated in January, the USDA said. Its outlook exceeded the average estimate of analysts surveyed by Bloomberg of 82.7 million tons for Brazil and 52.9 million tons for Argentina.

Chinese Imports

There may also be concern about cancellations of Chinese purchases of U.S. soybeans later in the season, said Kieran Walsh, a commodities broker at Aurel BCG in Paris. The Asian nation is the world’s biggest importer of the oilseed.

Harvests in South America will help satisfy “rampant” global soybean demand, according to Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.

Soybeans are 2.03 times more expensive than corn, the least in a week, compared with a 10-year average of 2.4 times. The crops compete for acreage.

Corn for delivery in March slipped 0.4 percent to $7.0625 a bushel, on course for a seventh drop in a row, and wheat for delivery the same month fell 0.6 percent to $7.52 a bushel. Milling wheat for delivery in May traded on NYSE Liffe in Paris declined 0.2 percent to 241 euros ($322) a ton.

Before it's here, it's on the Bloomberg Terminal.