Grain and soybean futures started the week lower on large harvest forecasts, while traders watched for signs that Tropical Storm Harvey could hamper U.S. crop supply.
Prices fell on Monday after advisory firm Pro Farmer forecast last week another large U.S. corn and soybean harvest, with soybean production at 4.33 billion bushels and corn at 13.95 billion bushels this year. Meanwhile, rising wheat production estimates from Russia added to the pressure.
The prospect of large supplies helped temper concerns about Harvey, which brought agricultural activity in the Texas Gulf region to a halt. Ports were closed while some crops, particularly cotton and rice, were caught up in the storm. Still, analysts said the immediate consequences for prices were likely limited.
"The market is not particularly worried at this stage," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. "It's not taking away a lot of supply comfort."
That could change if problems deepen. Ports in the region, responsible for around a quarter of U.S. wheat exports, are expected to remain closed for at least the next 48 hours, according to the West Gulf Maritime Association. Grain elevators were also out of operation.
That is forcing exporters to divert shipments to other ports or delay them, increasing costs and potentially further building up domestic stockpiles. A delay of around a week would cause minimal disruption to the supply chain, said Matt Boucree, president of Blue Water Shipping Company, which coordinates shipments of grain and other materials from U.S. ports.
The fallout could be more significant if weather damages power infrastructure at the elevators, Mr. Boucree said, though those problems may take longer to identify.
Analysts are worried that Harvey's path could damage crops in the Delta. The remnants of the storm could cause localized flooding for soybeans in the region later this week, said Commodity Weather Group, though limited rainfall after that should allow for recovery.
Meanwhile, falling crude-oil prices on Monday added to the pressure on grain and soybean markets.
September-dated wheat futures fell 2.3% to $4 a bushel at the Chicago Board of Trade, closing at the lowest point since December.
CBOT September corn contracts fell 0.8% to $3.36 a bushel, also trading at the lowest point since December, while September soybeans slid 0.4% to $9.35 1/4 a bushel.
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(END) Dow Jones Newswires
August 28, 2017 16:18 ET (20:18 GMT)