By Michael Hirtzer
CHICAGO, Sept 23 (Reuters) – Cash prices for U.S. soybeans have dropped by as much as $5 per bushel since last week as processors have slashed historically high bids for the beans during the early phases of a record harvest, grain merchants and analysts said on Tuesday.
Soybean prices that reached nearly $15 per bushel at a closely watched crushing plant in Claypool, Indiana, last week were about $9.80 on Tuesday for immediate deliveries, with further declines expected in the so-called “basis,” or the amount above or below benchmark Chicago Board of Trade soy futures that buyers are willing to pay.
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As of Sunday, farmers had harvested 3 percent of what is forecast to be the largest soy harvest ever, 3.91 billion bushels, USDA said. Fresh supplies and forecasts for warm temperatures, which will speed the drying down of the crop, sparked declines in the soybean bids.
“Basis crashing has been expected from both a seasonal perspective on the harvest and amplified by the sheer magnitude of the crop,” said Christopher Narayanan, head of agriculture research at Societe Generale in New York.
CBOT soy futures <0#S:> declined for the fourth straight session to a four-year low on Tuesday on the outlook for good harvest weather.
Corn prices were near a five-year low, outpacing declines in soybeans. Farmers in South America are likely to favor soy during the approaching planting season, with the bigger global soy supply expected to result in lower prices for farmers, and crushers such as ADM.
“With another strong Brazilian crop expected, this certainly paves the way for cheaper prices from an end user standpoint,” Narayanan said.