U.S. grains: Soy futures end up but notch weekly loss after China buys Argentina crops

Chicago | Reuters — Chicago Board of Trade soybean futures finished slightly higher on Friday but posted a second weekly loss after China made large purchases of Argentine cargoes this week, snubbing U.S. supplies.

Wheat and corn futures closed lower.

Soybeans came under pressure this week from China’s lack of demand for the U.S. crop due to tit-for-tat tariffs in the trade war between Beijing and Washington. U.S. soybean farmers have been shut out of China, their top export market, during this harvest season as Beijing’s retaliatory tariffs have made their crops prohibitively expensive for Chinese buyers.

After Buenos Aires briefly suspended grain export taxes this week, around 40 Argentine soybean cargoes were registered for export in November and December, mostly headed to China, two traders told Reuters. These purchases directly eat into the prime U.S. marketing season.

On Thursday, Argentina reinstated export taxes.

“That news has been digested and the taxes have been implemented, so soybeans should have seen the bulk of selling from that news item,” said Brian Hoops, president of Midwest Market Solutions.

CBOT November soybeans SX25 ended 1-1/2 cents higher at $10.13-3/4 per bushel. The contract dropped about 1.1 per cent for the week.

When asked if China would purchase U.S. soybeans, a Chinese commerce ministry spokesperson said Washington should remove tariffs on Chinese products that Beijing considered unreasonable.

The advancing U.S. soy and corn harvests put further supply pressure on futures prices, though doubts over the size of corn yields have lent support to that market.

The U.S. Department of Agriculture is slated to issue a weekly update on harvesting progress on Monday. On Tuesday, the agency is set to issue quarterly data on U.S. grain stocks.

“Corn is facing an active harvest weekend ahead with weather turning warmer and drier,” Hoops said. “The window should be wide open for corn and soybean harvest.”

CBOT December corn CZ25 closed down 3-3/4 cents at $4.22 per bushel. December soft red winter wheat WZ25 closed 7-1/4 cents lower at $5.19-3/4 per bushel.

— Reporting by Tom Polansek in Chicago, Naveen Thukral and Sybille de La Hamaide