Chicago | Reuters — U.S. soybean and wheat futures fell sharply on Wednesday, with wheat sinking 3.2 per cent and soybean futures hitting their lowest in more than nine months.
Traders said that long liquidation by investment funds triggered the sell-off. Concerns about trade with China sparked the bearish wave in soybeans while wheat was ripe for a round of profit-taking after surging 3.9 per cent on Tuesday.
“Realistically, we are just kind of out of gas,” said Bill Gentry, a broker with Risk Management Commodities in Lafayette, Indiana. “This is one of the days the funds are saying ‘I do not want to play anymore.'”
Chicago Board of Trade July wheat futures closed 18 cents lower at $5.16-1/2 a bushel (all figures US$).
“Wheat prices took a major hit from profit-taking, which took a big bite out of Tuesday’s gains, erasing most of them,” Farm Futures analyst Ben Potter said in a note to clients.
CBOT soybeans for July delivery were down 18 cents at $9.36 a bushel. The most-active contract hit its lowest since Aug. 31.
“Tensions may soon be ratcheting higher with China,” said Arlan Suderman, chief commodities economist with INTL FCStone. “The Trump Administration indicated a couple of weeks ago that it was preparing to implement tariffs on up to $50 billion of goods and services coming from China on June 15.”
A media report renewed fears that China could hit U.S. soybeans with retaliatory tariffs if Washington follows through on threats to slap duties on Chinese goods, traders and analysts said.
Soybean futures have fallen for seven of the last eight days, shedding 8.3 per cent during that time.
CBOT July corn futures were 1-1/2 cents lower at $3.76 a bushel, with the weakness in wheat and soybeans spilling over into the corn market.
Private analytics firm Informa Economics cut its estimate of 2018 U.S. corn plantings to 88.706 million acres, from 89 million.
Forecasts for crop-boosting rain in key growing areas of the U.S. Midwest for the next week added pressure to both corn and soybeans.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.