Soybeans Decline Amid Record U.S. Acreage, South American Crops

Soybeans fell for the first time in three days on speculation that record acreage in the U.S. will lead to surging global inventories as South American farmers harvest their biggest crops ever.

U.S. growers will sow 78.1 million acres, up 0.8 percent from last year, the government said on March 31. The combined output in Brazil and Argentina, the biggest exporters behind the U.S., will jump 35 percent this year and worldwide stockpiles will climb 44 percent before Sept. 1, the Department of Agriculture has said.

“Big crops in South America are going to slow demand for U.S. exports,” saidJim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “The supply situation is bearish with normal U.S. growing-season weather.”

Soybean futures for May delivery fell 6 cents, or 0.6 percent, to $9.465 a bushel on the Chicago Board of Trade. The price gained 1.8 percent in the previous two days. The most- active contract has dropped 9.7 percent this year.

Farms and warehouses held 1.27 billion bushels in storage on March 1, topping analyst estimates, government data show.

Tomorrow, the USDA may say U.S. stockpiles as of Sept. 1, before this year’s harvest, will rise to 208.3 million bushels, according to the average estimate of 23 analysts surveyed by Bloomberg News. The government estimate in March was 190 million. A year earlier, supplies were 138 million.

“Anticipation of rising inventories is limiting new buying,” Gerlach said.

The soybean crop in the U.S. was valued at $31.8 billion last year, second behind corn, government figures show.

Jeff Wilson
Source: Bloomberg