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Huge US crop estimates send prices tumbling

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Soybeans slumped 4.0% to their lowest since April, sending wheat to a fresh two-year low, after Informa Economics estimated the US was on course for huge autumn harvests.

The US analysis group estimated the US soybean crop at 3.37bn bushels, at a yield of 44.1 bushels per acre.

The estimates, besides being a record on both counts, beat the current US Department of Agriculture production forecast by 170m bushels (11.4m tonnes) and yield guess by 2.4 bushels per acre.

For corn, Informa pegged production at 13.3bn bushels, with a yield of 168 bushels per acre.

Again, both figures were way ahead of USDA estimates, by 540m bushels (33.9m tonnes) for output – equivalent to Mexican and South African production combined - and 9.5m bushels for yield.

'Floor-wide losses'

Informa's estimates were even bigger than the FCStone numbers released earlier this week, and come as traders are preparing for the latest USDA forecasts on September 11.

"These are, of course, bearish numbers and are contributing to the floor-wide losses, still led by beans," Vic Lespinasse, analyst, said.

Chicago's soon-to-expire September soybean contract sank to $9.69 a bushel, its lowest for five months, before recovering some ground to stand at $9.77 ¾ a bushel at 16:15 GMT, down 3.1% on the day.

New crop November beans were 1.6% lower at $9.36 a bushel, helped somewhat by official data showing a robust 1.11m tonnes of export sales over the last week.

Grains hurt

Export sales were good for corn too, at 345,000 tonnes for old crop and 594,000 tonnes for new crop.

Still, Chicago's September contract dipped 1.8% to $3.07 ¾ a bushel, falling to a percent or so above the 2009 low for a near-term contract.

December corn lost 6.25 cents to $3.13 a bushel.

While wheat was not included in the Informa data, with the US spring crop harvest well under way, the grain was dragged lower by its peers.

September wheat fell to $4.47 ¼ a bushel at one stage – the lowest since April 2007 - before reviving to $4.48 ¼ a bushel, down 1.9% on the day. December wheat lost 9.25 cents to $4.76 ½ a bushel.

London wheat did not escape collateral damage, with the November contract dropping £1.25 to £96.00 a tonne.

Paris wheat retained some of the glow from Wednesday's huge Egyptian order, closing up E0.25 at E126.50 a tonne for November delivery.


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