Bloomberg News

Soybeans Slide to Lowest Since June After USDA Raises Outlook

November 12, 2012

Soybeans fell for a fourth session in Chicago to the lowest price since June after the U.S. government raised estimates for global ending stockpiles on higher yields in the country than forecast last month.

World stocks will be 60 million metric tons before the 2013 Northern Hemisphere harvest, 4.3 percent more than forecast in October on a bigger-than-expected U.S. crop, the nation’s Department of Agriculture said Nov. 9. That beat the average 57.5 million-ton analyst prediction in a Bloomberg survey.

“In soybeans the numbers surprised the most, with a yield estimate above traders’ expectations,” Paris-based farm adviser Agritel wrote in a market comment. “In this context ending stocks are increased, both in the U.S. and the world.”

Soybeans for delivery in January declined 1.8 percent to $14.255 a bushel by 2:40 p.m. Paris time on the Chicago Board of Trade. The oilseed reached $14.2125, the lowest level for a most-active contract since June 29, after climbing to a record $17.89 in September on concern the worst U.S. drought in half a century would shrink global supply.

The USDA raised its yield forecast for the country by 4 percent to 39.3 bushels an acre, adding about 3 million tons to national production.

“Risks of critically tight soybean inventories continue to fade quickly,” Damien Courvalin, an analyst at Goldman Sachs Group Inc., said in a report dated Nov. 9. He cut the bank’s three-month price forecast to $16.50 a bushel from $18.75.

Corn for delivery in March was unchanged at $7.42 a bushel and wheat for delivery in December slid 1 percent to $8.775 a bushel. Milling wheat for delivery in January traded on NYSE Liffe in Paris fell 0.8 percent to 274.75 euros ($349.54) a ton.

The USDA unexpectedly increased its estimate for global wheat inventories to 174.2 million tons from 173 million tons while paring its outlook for demand by 3 million tons on reduced feed use. Analysts had predicted stockpiles of the grain would slip to 171.5 million tons, according to the average estimate in a Bloomberg survey.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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