Soybeans Futures Have Biggest Quarterly Slide in 35 Years

By Jeff Wilson

Sept. 30 (Bloomberg) -- Soybeans fell, capping the biggest quarterly decline in 35 years, after the U.S. Department of Agriculture said the oilseed crop and inventories were larger than forecast.

Reserves supplies on Sept. 1 were 205 million bushels, up 46 percent from 140 million projected by the agency on Sept. 12. Analysts in a Bloomberg survey expected 143 million on average. Last year's crop was 2.676 billion bushels, up 3.5 percent from an earlier estimate, after more acres were harvested and yields rose, the USDA said today in a report.

``Last year's crop was bigger than most people assumed, so this was quite a surprise,'' said Mark Schultz, a vice president at Northstar Commodity Investments LLC in Minneapolis. ``This supply boost puts the market in a position to fall because it means that even if this year's crop is a little smaller, there will be ample supplies.''

Soybean futures for November delivery tumbled 49 cents, or 4.5 percent, to $10.45 a bushel on the Chicago Board of Trade. The price fell 34 percent in the quarter, the most since 1973. Earlier, the price touched $10.39, the lowest for a most-active contract since Nov. 12.

In the month, the oilseed dropped 21 percent, the most since March. Soybeans rose to a record $16.3675 on July 3.

The number of acres planted last year was revised to 64.74 million, up 1.7 percent from a year earlier, the USDA said. Harvested acres were 64.14 million acres, up 2.1 percent. The yield was 41.7 bushels an acre, up 1.2 percent from a January forecast.

Annual Forecast

U.S. farmers will harvest 2.934 billion bushels this year, up 9.6 percent from last year's revised crop, the USDA said on Sept. 12. Yields were forecast at 40 bushels an acre, down from 40.5 bushels estimated in August.

Soybean usage in the quarter that ended Aug. 31 fell 9.2 percent to 471 million from a year earlier, the government said.

Index funds that invest in baskets of commodities reduced net-long positions, or bets prices will rise, by 3 percent to 134,607 soybean contracts in the week ended Sept. 23, Commodity Futures Trading Commission data showed on Sept. 26. That was down 32 percent from the all-time high of 198,707 in February.

``Record prices slowed demand,'' said Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin. ``The supply story is likely to keep people from rushing back into the market.''

Soybeans are the second-biggest U.S. crop, valued last year at $26.8 billion, government figures show. Corn is the largest at $52.1 billion.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.