Chicago | Reuters — U.S. soybean futures slid to a two-month low on Wednesday on technical selling and expectations that increased rains will benefit crops in rival shipper South America.
Corn and wheat futures also fell as traders adjusted positions ahead of Thursday’s Thanksgiving holiday, when U.S. markets will close. The markets will reopen for a shortened trading session on Friday.
The latest declines hit agricultural prices that have been under pressure for more than a year from the U.S.-China trade war, which has slowed exports of U.S. farm products.
China is the world’s biggest soybean importer and bought $12 billion worth of the crop from the United States in the year before the dispute began (all figures US$). It then turned to Brazil for supplies, instead of the U.S.
Rainfall is expected to increase across Brazil over the next week, leading to major improvements in soil moisture across northern and central growing areas, according to weather firm Maxar.
“The weather prospects for South America have improved and without a trade agreement signed with China, there is not a lot of reason to buy soybeans at this time, other than a technical upward correction,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
The most-active soybean contract on the Chicago Board of Trade slipped 0.3 per cent to $8.82 a bushel and hit its lowest price since Sept. 20. Corn dropped 1.3 per cent to $3.73-1/4 a bushel while wheat dipped 0.9 per cent to $5.26-3/4 a bushel at the CBOT.
Deliveries against CBOT December wheat futures should be minimal on Friday, the first notice day, traders and analysts said.
The U.S. Department of Agriculture is due to issue weekly export sales data separately on Friday, one day later than normal because of the Thanksgiving holiday.
Traders and farmers have been hoping a trade deal with China could boost U.S. crop exports.
Washington and Beijing are close to an agreement on the first phase of a trade deal, U.S. President Donald Trump said on Tuesday, after top negotiators from the two countries agreed to keep working on remaining issues.
U.S. farm equipment sales have also taken a hit because the trade dispute has left farmers struggling to turn a profit. Deere and Co. warned of lower earnings next year after reporting a fall in quarterly profits.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.