Wednesday, 11 March 2015 01:38
CHICAGO: Chicago Board of Trade soybean futures fell on Tuesday after the U.S. Department of Agriculture surprised analysts by leaving its forecast of U.S. soy ending stocks unchanged in a monthly report.
A strong dollar hung over the entire commodities sector, pressuring corn and wheat as well as crude oil and copper.
At the CBOT at 12:50 p.m. CDT (1750 GMT), CBOT May soybeans were down 7-3/4 cents at $ 9.85-1/2 per bushel. May corn was down 2-1/4 cents at $ 3.86-1/2 a bushel, and May wheat was down 1/2 cent at $ 4.89-1/2 a bushel.
The U.S. dollar hit its highest since 2003 against a basket of currencies as the prospect of the first rise in U.S. interest rates in almost a decade stoked global volatility.
Strength in the dollar makes U.S. grains less attractive to those holding other currencies.
“The dollar automatically tends to put a lid on things,” said Tom Fritz, a partner at EFG Group in Chicago.
Soybeans led declines at the CBOT after the USDA in its March supply/demand report left its forecast for U.S. 2014/15 ending stocks unchanged at 385 million bushels, above an average of analyst estimates of 376 million.
The government raised its forecast for global soy ending stocks to 89.53 million tonnes from 89.26 million last month.
“The surprise for me was that USDA chose not to change soybean numbers on this report for both the U.S. side and Brazil and Argentina. That might be a little concerning to some of the bulls in the market,” said Rich Nelson, chief strategist at Allendale Inc.
Corn futures briefly rallied after USDA cut its domestic corn ending stocks forecast to 1.777 billion bushels, a figure that fell below trade expectations, and was down 50 million from last month.
But the bearish trend in outside markets overshadowed the USDA’s corn view.
“We’re looking at a report that’s going to quickly be forgotten. Also, you have to look at it in the scope of a sharply higher dollar and the Dow sharply lower, so you’ve got the macro markets working against you as well,” said Jim Gerlach, president of A/C Trading.
Copyright Reuters, 2015
