U.S. grains: Corn, soy decline as China trade uncertainty lingers

December wheat also closes lower

cbot december corn
CBOT December 2019 corn with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. corn and soybean futures closed lower on Tuesday on technical selling and seasonal pressure from the expanding U.S. harvest, along with uncertainty about the terms of a U.S.-China trade pact announced last month, analysts said.

Wheat followed the weaker trend, with all three markets retreating from multi-month highs established a day earlier.

Chicago Board of Trade December corn settled down 4-1/2 cents at $3.93-1/4 per bushel and November soybeans ended down 6-1/2 cents at $9.34 a bushel (all figures US$). CBOT December wheat finished down four cents at $5.07 a bushel.

Corn fell more than one per cent as the December contract set back from a two-month high set a day earlier at $4.02-1/2.

“The dark cloud that keeps hanging over this market is the Chinese trade deal … I think what was announced last Friday was very premature,” said Karl Setzer, commodity market risk analyst for AgriVisor.

U.S. President Donald Trump said on Friday that China had agreed to purchase $40 billion to $50 billion worth of U.S. agricultural goods in a first phase of an agreement to end the trade war.

But China would make the purchases only if Trump rolls back levies put in place since the trade war began, Bloomberg reported on Tuesday, citing people familiar with the matter.

Chinese firms have already purchased 700,000 tonnes of pork and 700,000 tonnes of sorghum from the United States this year to meet market demand, a foreign ministry spokesman said, although U.S. government data pointed to smaller pork sales.

China has also bought 20 million tonnes of soybeans from the United States, along with other products, spokesman Geng Shuang said at a daily press briefing.

“They (China) did buy some agricultural products,” said Don Roose, president of Iowa-based U.S. Commodities. However, Roose added, “There is not clarity as far as where we are at, and the market doesn’t like uncertainty.”

CBOT soybean futures were also pressured by monthly data showing a smaller-than-expected U.S. soybean crush.

The National Oilseed Processors Association (NOPA) said its members crushed 152.6 million bushels of soybeans in September, down nine per cent from August and below the lowest in a range of trade expectations.

And the U.S. harvest of corn and soybeans is progressing, although at a slower pace than normal. After the CBOT close, the U.S. Department of Agriculture reported harvest progress at 22 per cent for corn and 26 per cent for soybeans, compared with the five-year averages of 36 and 49 per cent, respectively.

Analysts surveyed by Reuters had expected the government to show the corn harvest as 24 per cent complete and the soybean harvest as 25 per cent complete.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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