U.S. soy sags as Brazil's harvest looms; Fed announcement awaited
New throughout; updates prices, adds quotes, changes byline, changes dateline from previous PARIS/SINGAPORE
By Julie Ingwersen
CHICAGO, Feb 1 (Reuters) -U.S. soybean futures fell more than 1% on Wednesday as traders focused on the expanding harvest of a likely record-large soy crop in Brazil and awaited the Federal Reserve's decision on interest rates later in the day, analysts said.
Wheat futures sagged on profit-taking a day after climbing to a four-week high, while corn prices turned up, rallying from early declines.
As of 12:48 p.m. CST (1848 GMT), Chicago Board of Trade March soybeans SH3 were down 18-1/2 cents at $15.19-1/2 per bushel. CBOT March wheat WH3 was down 3/4 cent at $7.60-1/2 a bushel while March corn CH3 was up 1-1/2 cents at $6.81-1/4 a bushel.
Soybeans turned lower on expectations of a bumper South American harvest. Brokerage StoneX raised its forecast of the soybean harvest in Brazil, the world's biggest exporter, to a record-high 154.2 million tonnes, from 153.79 million last month. The harvest is under way and about 5% complete, consultancy AgRural said on Monday.
"Brazil's harvest continues to accelerate. We (U.S. soy suppliers) are not competitive," said Don Roose, president of Iowa-based U.S. Commodities.
Expectations for the massive Brazilian crop overshadowed concerns about the size of Argentina's drought-hit harvest, Roose said. CBOT soy futures had early support after a report from the U.S. Department of Agriculture's attache in Buenos Aires on Tuesday slashed its unofficial estimate of the Argentine soy crop to 36 million tonnes, well below the USDA's official forecast of 45.5 million.
"We have got a lot of bullish news (already) dialed in with the Argentine crop loss. Will we see a lower number than the attache? I don't think so," Roose said.
CBOT wheat sagged on profit-taking but the benchmark March contract WH3 stayed inside of Tuesday's trading range. European wheat prices fell, pressured by cheap prices offered by Black Sea exporters in North Africa and the Middle East.
Investors are hoping the U.S. Federal Reserve later on Wednesday will signal an end to its cycle of interest rate hikes as some data suggests easing inflation and wage growth. MKTS/GLOB
Reporting by Julie Ingwersen in Chicago
Additional reporting by Gus Trompiz in Paris and Matthew Chye in Singapore
Editing by Subhranshu Sahu and Matthew Lewis
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.