US soy futures fall 2.9 percent on possible soy acres increase

US soy futures fell 2.9 percent on Friday (June 19) to a three-week low due to expectations of rising soy acres in the U.S. Midwest, traders said.

 

Weakness in soy futures weighed on corn prices, which shed one percent to close at their lowest level since May 5, and wheat prices, which closed at their lowest level since May 6.

 

For the week, soy were down 5.3 percent, corn was off 6.1 percent and wheat was 5-percent lower.

 

The expectations for increased soy acreage as well as good growing conditions in key states such as Iowa helped boost crop prospects and allay concerns over tight supplies.

 

Analyst Joe Victor said the trade's perception is likely to see some bigger acres coming in for soy.

 

Traders said analytical firm Informa Economics estimated US soy acreage at 78.9 million acres on Friday (June 19). The estimate compares with the US Department of Agriculture (USDA) March forecast for 76.024 million acres.

 

Planting delays around the eastern US Midwest throughout the spring caused some farmers to seed soy in areas that had initially been intended for corn.

 

A 20-percent rise in new-crop soy futures in recent months also enticed farmers to devote more acreage to soy.

 

Informa pegged corn seedings at 83.1 million acres, compared with the USDA estimate of 84.986 million acres.

 

Victor said rainy conditions have persisted throughout the eastern Midwest during the past few weeks, delaying the end of soy planting season and limiting any weakness in soy prices.

 

The key crop states of Illinois and Indiana, which together grow a quarter of the US soy crop, have some 1.3 million hectares of soy yet to seed - about 23 percent of their planned acreage. Usually, more than 90 percent of the acreage is planted by this time.

 

Chicago Board of Trade July soy futures closed down 34-3/4 cents at US$11.79 a bushel, the contracts lowest close since May 28. Wheat and corn prices edged downward on pressure from the soy drop and a downturn in crude oil prices.

 

Corn prices dropped this week as damp conditions in the US Midwest boosted prospects for crops already in the ground, while wheat prices declined on forecasts for dry weather in the Plains that will speed the harvest of the winter wheat crop.

 

However, reports of low yields in parts of top US wheat-growing state Kansas, and high levels of crop disease head scab in other regions may provide price support despite plentiful global supplies.