Chicago | Reuters — U.S. soybean futures neared a one-month low on Monday as traders watched and waited for China to make further purchases after re-entering the market recently as trade tensions eased.
Corn futures also came under pressure from disappointment over a lack of demand from China, traders said.
China bought U.S. soybeans on Dec. 12, the first big deals in six months, after U.S. President Donald Trump and his Chinese counterpart Xi Jinping met on Dec. 1 and set a 90-day negotiating window to resolve their trade differences.
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Still, U.S. cargoes face hefty tariffs that Beijing imposed as part of the conflict between the world’s two largest economies.
Without new sales to China, and as financial markets remain volatile, grain traders were reluctant to push crop prices higher, said Arlan Suderman, chief commodities economist for U.S. broker INTL FCStone.
“They really don’t want to go out on a limb and build any kind of ownership,” Suderman said.
The Chicago Board of Trade’s most actively traded March soybean futures ended down 0.1 per cent at $8.97 a bushel (all figures US$). The contract earlier dropped to $8.92-1/4, its lowest price since Nov. 28.
Most-active corn futures slipped 0.2 per cent to $3.77-3/4 a bushel, while CBOT wheat rose 0.4 per cent to $5.16-1/2 a bushel.
China’s soybean imports from the U.S. plunged to zero in November in a sign of the trade war’s impact on shipments. That was the first time since the fight started that China, the world’s largest soybean buyer, imported no U.S. supplies.
Instead, China has looked to South America to replace U.S. cargoes. Brazil is set to harvest a massive crop in the coming months, fuelling worries among U.S. farmers that China will continue buying from South America.
“The problem for the bean market is that the U.S. is rapidly losing its window for sales before South American beans become available,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
U.S. farmers hope China will buy other farm products, such as corn and grain sorghum, along with soy. However, there were no sales confirmed on Monday, disappointing traders.
“The trade is becoming tired of waiting for a Chinese corn purchase announcement,” Pfitzenmaier said.
Trading volumes were thin ahead of Tuesday’s Christmas holiday. CBOT markets closed early on Monday and will remain shut on Tuesday.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Naveen Thukral and Sybille de La Hamaide.
