Soybeans Slump as Risk of Frost Damage to U.S. Crops Recedes

By William Bi and Luzi Ann Javier

Sept. 24 (Bloomberg) -- Soybeans declined for the fourth time in five days on speculation that freezing weather in the Midwest will cause little damage to the crop in the U.S., the biggest exporter.

The biggest soybean and corn growing states in the U.S., including Iowa, Illinois and Indiana will have near- to above- normal temperatures from Sept. 29 through Oct. 7, according to a National Weather Service forecast yesterday. About 40 percent of the crop was beginning to drop leaves as of Sept. 20, the U.S. Department of Agriculture said yesterday. That’s a sign the plants are mature and ready for harvest.

“The risk of early frost keeps falling,” Tommy Xiao, analyst at Shanghai JC Intelligence Co., said by phone from Shanghai. “The trend toward a bumper crop is inevitable.”

November-delivery soybeans dropped as much as 1.2 percent, $9.0925 a bushel in after-hours trading on the Chicago Board of Trade. The contract was at $9.0925 at 1:18 p.m. Singapore time.

May-delivery soybeans traded on the Dalian Commodity Exchange fell as much as 2.6 percent to 3,605 yuan ($528) a metric ton, before trading at 3,616 yuan.

Soybean production will jump to a record 3.245 billion bushels, up 9.7 percent from last year, the USDA said in a Sept. 11 report. Yields will rise to 42.3 bushels an acre from 39.6 bushels last year, the department said.

Corn for December delivery fell as much as 2 percent, to $3.235 a bushel before trading at $3.235.

There’s a “good chance” corn yields in the U.S. will be higher than USDA’s estimate of 161.9 bushels an acre, Kona Haque, analyst at Macquarie Bank Ltd. wrote in a report. Macquarie raised its yield estimate to 162.4 bushels an acre.

Record Yield

A record average yield of 161.9 bushels an acre will push output in the world’s largest grower and exporter to 12.954 billion bushels in the year that began Sept. 1, the second- largest on record, according to the USDA forecast on Sept. 11.

Wheat for December delivery fell as much as 1.2 percent, to $4.545 a bushel in Chicago, before trading at $4.5575 a bushel.

West Australia’s wheat crop, the nation’s biggest, is starting to dry out “a little more than desired,” the Commonwealth Bank of Australia said in an e-mailed note today. Australia is forecast to be the world’s fourth-largest wheat exporter in the 2009-10 marketing year, with shipments expected at 14.5 million tons.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; William Bi in Beijing at wbi@bloomberg.net