Soybeans hit two and a half month lows Friday on speculative and technical selling, along with spillover from the outside markets. The dollar was down, but the Dow Jones Industrial Average and crude oil were lower. There was no new supportive news Friday and the trade expects a record crop this year. The sell off picked up steam after November breached the psychologically and technically significant $9 level. Also, harvest activity has increased and there’s warmer, drier weather in the forecast for next week, easing concerns over the tight supply somewhat. Still, given the current tightness of supply, demand and last year’s smaller than expected South American crop, there’s not much room for error. Informa Economics’ updated production estimate is 3.383 billion bushels with an average yield of 44 bushels per acre. Soybean meal and oil were lower on spillover from beans and the supply implications of a larger crop. Losses in oil were limited by product spread trade and recent strong demand. The Brazilian Vegetable Oils Industry Association estimates domestic 2009/10 soybean crushing at 32.2 million tons, compared to 2008/09’s 29.8 million. Stats Canada has 2009/10 canola production at 10.269 million tons, up from August’s estimate but down from last year.
Corn was lower on fund and technical selling, in addition to spillover from soybeans and crude oil. There was no supportive news for corn and this year’s crop should be a record or near record. Losses were limited by some development concerns and harvest delays. Considering corn’s negative fundamentals, primarily coming from the supply side, corn has held up relatively well, especially in comparison to the drop in beans. In fact, corn only posted a fractional loss on the week. Informa Economics’ expects the USDA next week to put 2009/10 U.S. corn production at 13.127 billion bushels with an average yield of 164.7 bushels per acre while their “mostly likely” production figure for a final crop is 13.393 billion bushels with an average yield of 168 bushels per acre.
The wheat complex was lower on fund and technical selling. The fundamentals remain very negative with a large available supply and weak demand. Chicago December made a new contract low but did manage to close above support at $4.40, both in open outcry and electronic trade. Kansas City December also made a new contract low, while Minneapolis December held above the contract low established Wednesday. USDA announced late Thursday that it will conduct a new survey of spring wheat producers in Idaho, Minnesota, Montana and North Dakota as a significant number of farmers weren’t finished harvesting. The new numbers are expected to be released November 10. The non-commercial funds, according to Dow Jones Newswires, still have big net short position, which could lead to short covering. The dollar’s going to be a factor as well for wheat. European wheat was mixed on supply fundamentals against short covering; November Paris was down .6% and November London was up .3%. Statistics Canada projects 2009/10 wheat production to total 24.580 million tons, below the range of estimates, but above August’s estimate.
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