Soybean and corn futures dipped in Chicago this afternoon following the World Agricultural Supply and Demand Estimates (WASDE) report revealed the US raised estimates for domestic stocks.
Soybeans fell as much as 2% to $12.00 per bushel after domestic stocks will be around 320 million bushels at the end of the season, compared with an earlier estimate of 298 million. Corn fell as much as 2% to $5.22 per bushel after domestic stocks were larger than expected, at around 1.5 billion, compared with an earlier estimate of 1.418 billion.
Ahead of the report, the Bloomberg Agriculture Spot Index has declined a little more than 2% over the last few sessions.
Charlie Sernatinger, head of global grain futures at ED&F Man Capital Markets Inc. in Chicago, told Bloomberg that end-of-season estimates for corn suggest prices to dip below $5 per bushel. He said soybean ending stocks will continue to increase in future reports: "None of the row crop numbers look bullish, either short term, or down the line for further revisions."
Meanwhile, wheat prices moved higher on the session and are increasingly diverging from corn and soybeans. That's because of tight supplies.
The biggest takeaway from the report is that larger than estimated corn and soybean estimates are putting downward pressure on crop prices that might be a sign of relief for soaring food prices. The latest UN data showed global food prices hit a fresh decade high earlier this month.