U.S. grains: Soy falls below US$9 on South America weather, trade doubts

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

Chicago | Reuters — U.S. nearby soybean futures closed below $9 a bushel on Friday for the first time since September, pressured by improving crop weather in South America and fears that an initial U.S.-China trade deal could be pushed back to next year, analysts said.

Wheat futures ended higher, while corn settled narrowly mixed.

Chicago Board of Trade January soybeans finished down four cents at $8.97 per bushel after dipping to $8.95-1/2, the lowest spot price on a continuous chart since Sept. 30.

CBOT December wheat settled up 6-1/4 cents at $5.15-1/4 a bushel but stayed inside of Thursday’s trading range. December corn ended up 1/4 cent at $3.68-3/4 a bushel, while deferred corn contracts closed modestly lower.

Soybean futures fell for a third straight session as forecasts called for beneficial rains in crop areas of Brazil and Argentina, the world’s No. 1 and No. 3 soy producers. The United States is the No. 2 soy grower.

“Planting has moved along impressively in Brazil and Argentina. Improved weather in South America is weighing on soybeans,” said Don Roose, president of Iowa-based U.S. Commodities.

The soy market has also been pressured this week by uncertainty about prospects for a U.S. trade deal with China, the top global soy importer. U.S. President Donald Trump told Fox News a trade deal was “potentially very close,” adding to optimism following remarks by President Xi Jinping that Beijing wanted to work out an initial agreement.

Reports earlier in the week had indicated a deal could be delayed to 2020.

“We keep hearing positive things, but we keep kicking the can down the road,” Roose said of a potential “phase one” deal.

CBOT corn drew support as demand improved from exporters and domestic processors. Some traders may be liquidating long soy/short corn spread positions ahead of the Nov. 28 U.S. Thanksgiving holiday, as well as first notice day for deliveries against CBOT December futures contracts, on Nov. 29.

“Funds are long beans and short everything else; it may be some evening up, going into the snoozeville holiday week,” said Jim Gerlach, president of Indiana-based A/C Trading.

CBOT wheat rose on short-covering coupled with worries about a drop in U.S. wheat acres. The slow pace of the U.S. corn and soybean harvest this autumn may have limited the number of winter wheat acres planted for harvest in 2020, Gerlach and others said.

U.S. farmers planted 45.2 million acres of wheat overall for 2019, the fewest in U.S. Department of Agriculture records dating to 1919.

“You can’t keep going down in acres forever. At some point wheat has to buy market share,” Gerlach said.

— 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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