Soybeans lost their slender grip on $15 a bushel after farm
officials revealed that importers had cancelled 420,000 tonnes of orders from the
US, sparking concerns that elevated prices are scaring buyers.
Chinese importers cancelled 300,000 tonnes in orders of US
soybeans, with buyers from unknown destinations scrapping purchases of a
further 120,000 tonnes, the US Department of Agriculture said.
While no reason was given for the cancellations, they were
widely presumed to be motivated by a wish to cash in on prices which remain
high by historical perspectives, if well below record top of $17.94 ¾ a bushel
set in September.
"It may be that when the Chinese bought the soybeans, they
bought futures to cover themselves," said Don Roose, president of US
With the position in profit, "they washed out of the cash
and sold the futures".
"It looks like crops are getting bigger in South America.
The USDA is expected to add 0.5-1.0 bushel an acre to its estimate for the last
US soybean yield in the next Wasde crop report," both factors which suggest
lower soybean prices.
"And China has already bought a big percentage of what it
needs for this season."
China has purchased more than 18m tonnes of US soybeans
alone, in completed exports and outstanding sales, so far in 2012-13.
'Trying to be cute'
However, at Rice Dairy, Jerry Gidel said that there was
still reason to think that selling now might not prove a winning bet, given
that South American crops are not yet in the bag, and demand is strong both in
the US and on export markets.
"I am in the mindset that someone is trying to be cute," Mr
Gidel told Agrimoney.com.
"It might work, it might not. But I do not thinks producers are
going to pay a lot of attention to this," and expedite sales.
Argentina vs Brazil
The sale came amid mixed news on South American soybeans,
with RJ O'Brien describing the Brazilian crop's yield potential as "stable to
improving", with a harvest estimate of 82m-83m tonnes, ahead of the USDA's forecast
of 81.0m tonnes.
Influential crop scout Michael Cordonnier this week kept his
forecast for the crop unchanged at 80m tonnes, but said that the figure "could
However, Old World on Tuesday cut its forecast for the
Argentine crop by 1m tonnes to 53.0m tonnes, warning over the impact of rains
on slowing seedings.
"Although soybeans can be planted until January in several
areas, and although some of the intended corn area will be switched to
soybeans, it is still possible that total soybean plantings will turn out below
the intentions of 19.7m hectares," Oil World said.
"Also, later plantings will result in lower yields."
Soybean futures for January, having clambered back above $15
a bushel in early deals, retreated to $14.74 ¼ a bushel, a drop of 1.5%, with
some half an hour of Chicago trading yet to go.
The better-traded March lot stood 1.3% down at $14.68 ¾ a
The declines also took the contracts below their 50-day
moving averages, a negative technical signal.