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U.S. grains: Soybeans down with vegetable oil prices

Chicago July corn, wheat up

cbot july soybeans
CBOT July 2021 soybeans (candlesticks) with CME July 2021 crude palm oil and ICE July 2021 canola (green and yellow lines, left column). (Barchart)

Chicago | Reuters — U.S. soybean futures fell on Wednesday to their lowest level in nearly two months, pressured by a retreat in global vegetable oil prices from multi-year highs, analysts said.

Corn and wheat futures ended mixed, with the nearby July corn and wheat contracts closing higher, while back months declined.

Chicago Board of Trade July soybeans settled down 17-1/4 cents at $14.48-1/2 per bushel, after dipping to $14.42-1/2, the contract’s lowest since April 20 (all figures US$). CBOT July corn ended up 5-1/2 cents at $6.73 a bushel and July wheat rose 6-1/2 cents to close at $6.68 a bushel.

Soybean oil futures led the soy complex lower. CBOT July soyoil fell its 3.5-cent limit to 62.07 cents per pound, after soaring last week to 73.74 cents, an all-time high on a continuous chart of the front soyoil contract.

Euronext rapeseed futures and Malaysian palm oil futures ended lower on Wednesday as well.

All three markets have soared this year in response to tightening global vegetable oil supplies and brisk demand for biofuels.

But prices have cooled in recent days as traders took profits and digested reports that the U.S. Environmental Protection Agency was considering ways to provide relief to U.S. oil refiners from mandates requiring the blending of biofuels including soy-based biodiesel.

“All of a sudden you’ve got all sorts of red flags about that market. You don’t know what future demand is going to look like,” said Terry Linn, analyst with Linn + Associates, a Chicago brokerage. “You’ve got a market that is long from a fund perspective, and that technically is starting to unwrap here.”

The CME Group, parent of the CBOT, said CBOT soybean, soyoil and soymeal futures would trade with expanded daily limits for Thursday’s session.

Forecasts for improving weather in the U.S. Midwest crop belt pressured soybean and deferred corn futures, despite a drop in U.S. condition ratings for both crops this week.

“A cooler/wetter weather pattern will soon arrive across key U.S. crop regions, though heat/dryness risks will remain in the forecast to some extent regionally,” Isaac Hankes, senior weather research analyst at Refinitiv, said in a note.

CBOT wheat ended mixed as support from drought in the northern U.S. Plains spring wheat belt offset seasonal pressure from the start of the winter wheat harvest. Minneapolis Grain Exchange July spring wheat futures settled up 12-1/2 cents at $7.60-1/4.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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