CHICAGO - U.S. corn and soybean futures dipped on Wednesday on expectations that autumn harvests will exceed government forecasts due to favorable weather.
Prices extended losses one day after the U.S. Department of Agriculture issued a monthly report that projected smaller-than-expected production of both crops.
Traders shrugged off the forecasts as too low because mild, wet weather has been nearly ideal for crops and farmers have reported gorgeous-looking crops in their fields.
On Tuesday, the USDA pegged the U.S. corn harvest at a record 14.032 billion bushels, below analysts’ estimates of 14.253 billion, and 2014-15 ending stocks at 1.808 billion bushels, below expectations of 2.005 billion.
“We believe that in the end, the corn carryout will end up over 2 billion bushels and that the supply of grains around the world will severely limit any rallies,” said Tomm Pfitzenmaier, an analyst with Summit Commodity Brokerage in Iowa.
Chicago Board of Trade December corn slipped 0.8 percent to $3.66 a bushel by 9:15 a.m. MDT. November soybeans lost 0.8 percent to $10.51 a bushel, after setting a contract low of $10.43 a bushel in the previous session.
Soybean futures sank on Tuesday after the USDA forecast that U.S. 2014-15 ending stocks will reach 430 million bushels, above analysts’ expectations of 414 million bushels.
If crop weather remains favorable, November soybeans will likely drop to $9.50 or lower by the middle of harvest, Pfitzenmaier said.
Traders waited for results from private crop tours spreading out across the Midwest this month for new clues on the size of the autumn harvests. Next week, participants on the annual Pro Farmer Midwest Crop Tour will survey hundreds of corn and soy fields.
“The marketplace seems to be disregarding the USDA’s lower-than-expected yield estimates for this year’s U.S. crop,” said Kayla Burkhart, a broker for CHS SunPrairie in North Dakota.
CBOT wheat slumped for the fifth consecutive session due to large global supplies and spillover pressure from the corn market, traders said.
December wheat shed 0.3 percent to $5.49 a bushel.