U.S. grains: Soy falls as China cancels purchase, meal retreats

(Lisa Guenther photo)

Chicago | Reuters –– Chicago Board of Trade soybean futures fell one per cent on Tuesday on technical selling and on signs of slowing export demand for U.S. supplies, traders said.

Corn and wheat also declined.

At the CBOT, March soybeans ended down 9-3/4 cents at $9.73-3/4 per bushel (all figures US$). March corn fell 2-3/4 cents to $3.81-1/4, and March wheat finished down 1-1/2 cents at $5.19 a bushel.

Soybeans took cues from a setback in soymeal futures, which fell after the lead March contract failed to hold chart support above $340 a ton. March soymeal ended down $2.30 at $336.60 a ton.

Soymeal fell on profit-taking. Values had rebounded from a 2-1/2 month low set last week, buoyed by export demand as poor margins slowed meal production in Argentina, the world’s top supplier.

“It’s the meal market’s inability to follow through from yesterday’s rally. If the meal market can’t do it, the beans are not going to,” said Tom Fritz, a partner at EFG Group in Chicago.

Also bearish, the U.S. Agriculture Department confirmed that private exporters cancelled sales of 120,000 tonnes of soybeans to China for delivery in 2014/15. USDA said exporters also reported fresh sales of 111,000 tonnes of soybeans to unknown destinations.

“I think the cancellation more than outweighed the net addition to unknown destinations,” said analyst Terry Reilly at Futures International.

USDA’s announcement marked the third cancellation this month of soybean sales to top buyer China. The moves reflect a seasonal shift in the focus of the export market from the U.S. to South America, where the soy harvest is getting started.

Corn followed soybeans lower, with the March contract hovering just above chart support at its 100-day moving average.

Wheat fell on plentiful global stocks and weak export demand, with CBOT March hitting a three-month low at $5.17-1/2 a bushel. But losses were limited as the dollar slipped, which could boost demand for U.S. wheat among buyers holding other currencies.

Also, Ukraine’s agriculture ministry and traders agreed that no more than 1.2 million tonnes of milling wheat will be exported between Jan. 1 and June 30.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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