U.S. grains: Soybeans fall on demand concerns, Brazilian crop outlook

Des Moines | Reuters — Chicago soybean futures fell on Wednesday, shedding gains from the previous session, amid growing market concerns about export demand and improving weather for Brazil’s oilseed crop.

Recent rains have eased concerns over dryness, which had been threatening soybean crop yields in Brazil, the world’s top exporter of the oilseed.

Corn futures were steady to up, as investors in agricultural markets adjusted their positions ahead of a monthly report on global supply and demand, slated for Friday.

Traders are also expecting market guidance to come from this Friday’s USDA quarterly U.S. grain stocks report, and data on how much crop may be held by U.S. producers on their farms.

Wheat futures were steady to slightly higher on technical trading, analysts said.

Large parts of southern and eastern Australia saw above-average rainfall in December, causing flooding in some areas but helping many farmers, while western areas remained parched, the country’s weather bureau said on Tuesday.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 settled the day down 12 cents a bushel, to close at 12.36-1/2 a bushel.

Wheat Wv1 ended up 3/4-cent at $6.10-3/4 a bushel, while corn Cv1 settled up 1/4-cent at $4.59-1/2 a bushel.

Brazil’s crop agency Conab slashed the country’s soybean crop forecast on Wednesday, but said it still expects it to come in slightly higher than last season’s record output of 154.6 million metric tons.

Meanwhile, traders have growing concerns about export demand, as it has been weeks since the U.S. Department of Agriculture (USDA) has reported a flash sale on corn or soybeans, said Karl Setzer, partner at Consus Ag Consulting.

“Last week, we saw China purchase seven vessels of soybeans from Brazil”, where prices are lower than in the U.S., Setzer said. “But to meet their expected demand, China would need to be buying seven vessels a day. What the market is realizing is Chinese demand isn’t there right now.”

–Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.