BLBG: Soybeans Decline as Planting May Rise to Record, Rally Overdone
By Luzi Ann Javier
Feb. 17 (Bloomberg) -- Soybeans fell on speculation that an advance to a one-month high may have been excessive, and on concern that planting in the U.S., which accounts for 36 percent of global output, will rise to a record.
Soybeans for May delivery lost as much as 0.5 percent to $9.695 a bushel on the Chicago Board of Trade, before trading at $9.7125 at 2:30 p.m. Singapore time. It rose to 2.2 percent to $9.745 yesterday, the highest closing price for a most-active contract since Jan. 14.
Planting in the U.S., the world’s top grower and exporter, will rise 1.4 percent to a record 78.5 million acres, according to a survey of farmers in the past two weeks by Agrisource Inc., a U.S. brokerage and crop-insurance company.
“You might see a little bit of profit-taking when you see a market up that much overnight,” Peter McGuire, managing director at CWA Global Markets Pty, said from Sydney today. “I don’t see anything” that will support prices, he said.
May-delivery corn was little changed at $3.7925 a bushel at 2:22 p.m. in Singapore. It rose 1.5 percent higher yesterday.
Farmers across the Midwest, the largest U.S. growing region, may plant less corn than expected, according to Keith Gehling, a marketing consultant at AgriSource. The biggest producers in Iowa “are indicating shifting more acres away from corn and going back to more soybeans,” he said in an e-mailed report.
Corn planting across the U.S. will be 87.5 million acres, Gehling said, citing the survey. That compares with an estimate of 88.5 million acres on Jan. 29 by Mike Murphy, an analyst at CattleFax, an industry researcher.
Wheat Drops
Wheat for May delivery slid 0.1 percent to $5.19 a bushel after closing 3.6 percent higher yesterday. That was the biggest closing gain for the contract this year.
Hedge funds and other speculators increased their net-short positions in Chicago in the week ended Feb. 9 to the highest level since at least 1993, according to data from the U.S. Commodity Futures Trading Commission.
Bets prices will fall outnumbered so-called long positions by 60,457 contracts on the Chicago Board of Trade, the commission said in its Commitments of Traders report. Net-short positions rose by 7,576 contracts, or 14 percent, from a week earlier, it said.
“There was a short-covering rally” yesterday after positions had accumulated, said CWA’s McGuire. Still, fundamentals that point to global supply exceeding demand remain unchanged, he said.
To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net
