Soybean futures ended the week down more than 6 percent, the most in more than two years, as COVID-19 concerns weighed on financial markets and traders awaited further news on the Brazil harvest. Corn and wheat also slid.
Output in the world’s biggest soybean growing country might total 132.4 million tonnes, Agroconsult president Andre Pessoa has said.
While that is down a bit from a estimate in November last year, it would still be an all-time high as moisture shortages ease in the south.
Average yields are higher than last year, and recent conditions have been generally favorable.
Fear of drought in South America, along with logistical headaches and export restrictions in some key areas, have sent soy and grain futures rocketing to multiyear highs.
Yet more signs of a bumper soybean haul in Brazil would help ease worry about global supplies running short amid booming demand led by China.
“There’s been a huge run-up here. At this point why not take some of it out? You can get back in next week,” John Baize, an independent analyst who also advises the US Soybean Export Council, said in an interview. “My sense is that people are waiting to see what the weather does over the weekend.”
Baize said that he still sees some weather risk in South America.
Brazilian soy production remains “partially delayed and dry,” Rabobank NV analysts said in a report.
Still, recent moisture improvements have “staved off worst-case scenarios, and together with high US acreage, should prevent an inflationary spiral,” they said.
In Argentina, the largest shipper of soybean oil and meal, plants in the Pampas belt need rain soon as they reach the pod-formation stage, Buenos Aires Grain Exchange analysts said.
Raw materials from metals to oil fell on Friday, with the Bloomberg Commodity Index posting its biggest loss in three months on Friday.
Gold for February delivery fell US$9.70 to US$1,856.20 an ounce, up 1.5 percent for the week.
Silver for March delivery fell US$0.30 to US$25.56 an ounce and March copper fell US$0.02 to US$3.63 a pound.
March soybean futures slid 6.3 percent this week on the Chicago Board of Trade, the largest drop for a most-active contract since mid-2018.
Corn was down for the first week since last month, and wheat also posted a weekly loss. Last week, all three crops posted the highest prices in at least six years.
Corn futures slumped by the exchange limit of US$0.25 a bushel to below US $5.
Additional reporting by AP, with staff writer
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