South African maize futures drifted lower on Monday, as a bearish US government report on crop estimates weighed on sentiment.
The December white maize contract shed R8 to R2,438 per ton, the March 2012 white maize contract lost R5 to R2,394 per ton, while July 2012 white maize slipped R3 to R1,955 per ton, according to preliminary I-Net Bridge data.
The December yellow maize contract was down R5 to R2,530, March 2012 yellow maize shaved off R15 to R2,370 per ton and the July 2012 yellow maize contract was down R13 to R1,902 per ton.
The December wheat contract shed R26 to R2,639, March wheat was down R29 to R2,690 per ton, and the July 2012 wheat contract was unchanged at R2,758 per ton.
“The world maize ending stocks came in higher than expected, boosted by Chinese production, according to the US Department of Agriculture report,” said Theo Venter, a trader at Senwes. “Word ending stocks came in at 127.19 million tons from 121.57 million tons in November.”
Dow Jones Newswires reported that US soybean prices tumbled on Friday, with soybeans dropping more than 2%, after the US Department of Agriculture (USDA) reported a level of soybean inventories that were higher than expected.
The higher supply outlook put renewed pressure on prices.
The USDA, in a monthly report, estimated end-of-marketing-year domestic soybean supplies at 230 million bushels, up 18% from the department's estimate a month ago.
With fewer exports, US inventories are returning to more comfortable levels, easing concerns over supplies that drove futures to a three-year high in late August. Export demand is a key factor in determining the price of soybeans, with 45% of the soybeans grown in the US going to the export market during the last crop year ending August 31. As overseas demand shrinks, US soybean futures prices will slip.
The agency also raised its outlook for wheat supplies by 6%, expecting inventories to reach 878 million bushels ahead of next year's harvest. The higher inventories were the result of a 50-million-bushel reduction in projected US exports.
The cut in exports highlight US exporters' troubles competing amid abundant global supplies. “We're one of the highest-priced wheat sources out there. We've got these other countries that have cheaper feed wheat,” said Brandon Kliethermes, ag economist with IHS Global Insight.
US corn futures ended lower as USDA reports that global grain supplies continue to grow. “There were no noteworthy changes to the US corn balance sheet, but the bearish wheat and soy reports kept pressure on the market,” said Sal Gilbertie of Tecrium Corn Fund.
“With those two commodities getting a better supply situation, that will likely keep a damper on whatever corn wants to do on the upside, at least until the next report,” he added. - I-Net Bridge