U.S. grains: Soybeans sink on hefty supplies, trade worries

U.S. export optimism limits declines in wheat; traders weigh weather, await USDA data

may soybeans
CBOT May 2019 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures dropped to a four-month low on Wednesday on concern about the slow pace of U.S.-China trade talks, due to resume this week in Beijing, as harvesting of a bumper South American soy crop accelerates.

Soybeans were further pressured by positioning ahead of U.S. Department of Agriculture (USDA) acreage and stocks reports and by a weaker Brazilian real, which can boost farmer sales in Brazil.

Corn futures followed soybeans lower, although losses were limited by concerns about potential delays to U.S. spring planting due to floods.

U.S. export optimism underpinned wheat futures, which ended near unchanged.

A U.S. trade delegation will begin a visit to China on Thursday for the next round of negotiations to resolve a trade dispute that has disrupted U.S. soybean exports.

“There’s some trade talk uncertainty. You just don’t know what’s going to happen and there’s some concern that it may not be settled in short order,” said Brian Basting, analyst with Advance Trading.

“We’ve seen some long liquidation in view of that uncertainty and, other than that, traders are positioning ahead of Friday’s reports,” he said.

The prospect of farmers switching acreage from corn to later-planted soybeans because of waterlogged conditions has weighed on soybeans ahead of Friday’s USDA planting estimates.

The run-up to Friday’s report, which will be released along with quarterly grain stocks estimates, and a new round of U.S.-Chinese trade discussions were encouraging a cautious mood.

Chicago Board of Trade May soybean futures settled 13-1/4 cents lower at $8.87-1/2 a bushel, the lowest since Nov. 27 (all figures US$).

May corn was down 3-1/2 cents at $3.73-3/4 a bushel in a second straight day of declines, while CBOT May wheat gained 1/4 cent to $4.69-1/2 a bushel.

Wheat futures held near a one-month high after Egypt chose U.S. wheat in a tender on Tuesday, indicating American wheat was growing more price-competitive in the global market.

Egypt’s state grains buyer said Tuesday it bought 120,000 tonnes of U.S. soft red wheat in an international purchase tender.

Traders continue to monitor heavy snow pack in the northern U.S. Plains which could delay in planting spring wheat if there is a sudden thaw that could cause flooding.

Farmers from Missouri to South Dakota have seen their corn and soybean fields flooded after recent heavy rain and as winter snow melts, a sign of what may be in store for North Dakota.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.

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