US soybean futures tumbled on Monday trading posting their biggest percentage drop in nearly one year, on selling sparked by anecdotal accounts of better-than-expected yields in the Midwest farm belt.
Corn at the Chicago Board of Trade tumbled to a more than two-month low while wheat sank 5% under the weight of soybeans, which were considered to be the strongest fundamentally of the three. Soy's stocks-to-use ratio, a measure of demand, was the lowest in nearly five decades.
CBOT November soybeans fell 70 cents per bushel -- the most a contract can move either way on a trading day, as set by the exchange -- after accounts that farmers were getting better-than-expected yields in harvesting over the weekend.
Some of the better yields were coming from the western Midwest, an area that had remained dry as the worst drought in half a century devastated crops. The northern and eastern parts of the Midwest got beneficial rains in August.
Prices for soybeans in the cash markets in Iowa, the top corn and soybean state, fell sharply about two weeks ago, perhaps in an early signal of the better yields being harvested now.
Traders also attributed the sell-off to rains in Brazil, the world's second-largest exporter of soybeans after the United States, as its farmers gear up to plant their crop.
CBOT November soy slid 4% and registered the lowest front-month price since Aug. 20. CBOT new-crop December corn sank 4.4% or 34 cents a bushel and touched the lowest price for a nearby contract since early July. December wheat fell 5%percent.
The severe US drought in the Midwest drove nearby corn prices to a record high in early August and pushed soybeans to an all-time top in early September, leading to thoughts that buyers would ration demand in the face of high prices.
The US corn crop looks to be the smallest in six years, and the soybean crop the smallest in nine years, the US Department of Agriculture said last Wednesday. But with the harvest advancing, a dismal situation might be improving slightly.