U.S. grains: Corn, soy, wheat end lower ahead of long weekend

CBOT March 2020 corn with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. corn and soybean futures closed lower on Friday on technical selling ahead of a long holiday weekend and uncertainty about U.S. export prospects, traders said.

Wheat futures followed the weak trend, drifting lower in rangebound trade. A stronger dollar hung over the markets, making U.S. grains and soy less competitive to those holding other currencies.

Chicago Board of Trade March corn settled down 1-3/4 cents at $3.77-3/4 per bushel after dipping to $3.76-1/4, its lowest since Feb. 6 (all figures US$).

March soybeans settled down 2-1/2 cents at $8.93-3/4 a bushel and March wheat fell 1-1/2 cents to end at $5.42-3/4 a bushel.

Traders are waiting to see if China steps up purchases of U.S. agricultural products as the U.S.-China Phase One trade deal goes into effect this weekend, 30 days after its signing on Jan. 15.

Meanwhile, Chinese buyers purchased Ukrainian-origin corn in the past week, following deals for French wheat reported last week, European traders said.

China has also been booking soybeans from Brazil in recent days, traders said. And favorable weather in South America has bolstered expectations for large Argentine and South American harvests.

“The trade has been optimistic that we would see some purchases by China. But when they made that purchase of corn from Ukraine, the markets just backed off,” said Dewey Strickler, president of Ag Watch Market Advisors.

“There has been high hopes that we would see some (Chinese) purchases possibly as early as next week on (U.S.) soybeans, but if they don’t show up, that is going to put pressure on the soybean market and the other grains as well,” Strickler said.

China, the world’s largest soybean importer, committed to large increases in purchases of U.S. farm goods in the trade deal, although the spread of a new coronavirus has raised doubts about Chinese demand.

CBOT wheat futures declined, with the March contract finishing the week down 16 cents a bushel or nearly three per cent, following a slide in world cash prices.

“Global wheat prices have ticked down… and therefore U.S. wheat prices have followed suit,” said Joe Vaclavik, president of Standard Grain, a brokerage.

U.S. markets will be closed on Monday in observance of the Presidents Day holiday. Later in the week, the U.S. Department of Agriculture will hold its annual Outlook Forum on Feb. 20-21 during which the government will release projections for 2020 U.S. crop production.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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