Markets
Soybeans fall amid output concerns
By Luzi Ann Javier (China Daily)
Updated: 2010-06-10 11:33
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SINGAPORE - Soybean futures fell in Chicago on concern output from Brazil, the second-largest exporter, will grow faster than expected, stoking competition among suppliers.
Futures for July delivery declined for a third time in four sessions, losing 0.3 percent to $9.2825 a bushel on the Chicago Board of Trade at 2:18 pm Singapore time.
Farmers in Brazil, the biggest shipper after the United States, will harvest 68.7 million metric tons of soybeans this year, more than a May 6 estimate of 67.9 million tons and more than last year's output of 57.2 million tons, the Agriculture Ministry's crop-forecasting agency Conab said on Tuesday.
"Soybean prices, to our mind, have a downward bias because of the supply response," Luke Mathews, an agricultural commodity strategist at Commonwealth Bank of Australia (CBA), said on Wednesday. Investors are waiting for the next supply-and-demand outlook to be released by the US Department of Agriculture on June 10, he said.
Soybean inventory in US may be 183.6 million bushels at the end of the marketing year on Aug 31, smaller than the USDA's previous estimate of 190 million bushels because of higher demand, according to the average estimate of 28 analysts surveyed by Bloomberg News.
Soybean production in China may drop 3.3 percent to 14.5 million tons in the year from Oct 1, the China National Grain & Oils Information Center said on Wednesday.
Corn for July delivery was little changed at $3.37 a bushel after trading between $3.365 and $3.385.
Oil, dollar
Higher crude oil prices and a weaker dollar may help boost the appeal of US crop supplies to importers and investors, CBA's Mathews said.
The Dollar Index, which tracks the value of the greenback against six major currencies including the yen and the euro, declined for a second day, dropping 0.3 percent.
"The outside markets are a little bit friendlier, particularly the weaker start to the Dollar Index and crude oil prices trading in positive territory," Mathews said. "That's helping support the grains complex."
July-delivery wheat added 0.4 percent to $4.3375 a bushel. South Korea's Major Feedmill Group bought 110,000 tons of wheat through a private negotiation on Tuesday, according to three industry executives who took part in the transaction.
CJ CheilJedang Corp, South Korea's biggest food processor, and Dongah Flour Mills Co jointly bought 23,300 tons of milling wheat for shipment between Aug 15 and Sept 15 in a tender on Tuesday, said two industry officials who participated in the bidding.
Bloomberg News