Chicago | Reuters — U.S. soybean futures retreated on Monday, giving up more than half of their gains from a bargain-buying rally before the weekend as investors weighed the impact of reduced Chinese demand following Beijing’s tariffs on U.S. supplies.
Improved growing conditions in the U.S. Midwest also weighed on soybeans and corn before weekly government crop ratings later on Monday as well as monthly supply and demand forecasts on Thursday.
Sweltering heat across the Midwest farm belt is expected to ease by next week, when more of the corn crop will be entering its critical pollination stage. Crop boosting rains are also forecast for portions of the Midwest later this week.
“A lot of the market’s focus today is on the changing weather forecast and the idea that the intense heat will not hit a good portion of corn pollination in the weeks ahead,” said Rich Nelson, chief strategist with Allendale Inc.
“Falling temperatures are going to help ease pollination stress,” he said.
Chicago Board of Trade (CBOT) August soybeans fell 21-3/4 cents, or 2.5 per cent, to $8.55-3/4 a bushel, returning more than half of Friday’s 4.5 per cent gain (all figures US$). New-crop November soybeans shed 22-1/2 cents, or 2.5 per cent, to settle at $8.72 a bushel.
CBOT September corn dropped 6-1/4 cents, or 1.7 per cent, to $3.54 a bushel.
Analysts polled ahead of the U.S. Department of Agriculture’s (USDA) weekly crop conditions report expected the agency to trim corn and soybean conditions in the latest week, although overall ratings should remain near historic highs.
Grain traders are also positioning ahead of USDA’s monthly supply and demand reports due on Thursday. USDA is expected to begin cutting U.S. soy exports and increasing projected stockpiles amid a trade war with top importer China.
Expectations that Beijing’s extra 25 per cent tariff on U.S. soybeans will shift more sales to Brazil, the world’s top exporter, has contributed to a five-year high in the spread between U.S. and Brazilian prices.
Wheat tracked the weaker trend in corn and soy, which offset recent concerns about deteriorating wheat production prospects in Europe and the Black Sea region.
CBOT September wheat fell 7-1/4 cents, or 1.4 per cent, to $5.08 a bushel.
— Karl Plume reports on agriculture and commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.Tagged cbot, China, closing markets, corn futures, Midwest, soybean futures, tariffs, wheat futures