Soybean futures fell more than 3% Tuesday after a report showed an unexpected improvement in the U.S. crop.
The U.S. Department of Agriculture said late Monday that the share of the oilseed crop in good-or-excellent shape rose to 59% as of Sunday from 57% a week earlier. Analysts expected the good-or-excellent ratings to be steady to lower.
Combined with a turn for the better in weather forecasts across the central U.S., with more rain and cooler temperatures expected in the coming weeks, those ratings had traders rushing out of bets that soybean production would suffer this year.
"The weather forecasts look really favorable. We're going to have what looks like plenty of rain for most major soybean areas," said Joe Vaclavik, owner of brokerage Standard Grain Inc. at the Chicago Board of Trade. "The soybean crops are really made in August."
That prompted heavy selling in the soybean market. CBOT August oilseed futures fell 3.5% to $9.59 1/2 a bushel on Tuesday, closing at the lowest point since early July.
U.S. farmers this year planted more acres of soybeans than ever before, while farmers in Brazil produced their own bumper oilseed crop. Without a growing issue that limits this year's U.S. production, analysts say soybean prices, which are down for the year, could remain under pressure amid swelling global supplies.
The sharp losses in the soybean market also weighed on corn and wheat futures. The proportion of both crops in good-or-excellent condition fell last week, however, according to the USDA, with corn at 61% and spring wheat at 31%.
Still, outside markets added to the pressure on crop prices. A higher dollar hampered U.S. export competitiveness while lower crude oil prices took money out of the commodity market.
CBOT September wheat futures fell 2.8% to $4.61 1/4 a bushel while September corn dropped 2.2% to $3.62 1/2 a bushel. Spring wheat futures were also lower.
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(END) Dow Jones Newswires
August 01, 2017 15:55 ET (19:55 GMT)