Chicago | Reuters — U.S. soybean futures retreated on Wednesday ahead of an eagerly awaited U.S. government crop report, pressured by forecasts for favourable Midwest crop weather and disappointment that China did not include the oilseed on a list of U.S. imports exempted from tariffs.
Corn also weakened as late-planted U.S. crops were seen benefiting from a late-summer heat wave, although positioning ahead of the U.S. Department of Agriculture’s (USDA) monthly supply-and-demand report due on Thursday limited declines.
Wheat eased in tandem with corn and soy, pulling back from one-month highs in the prior session.
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There were good gains for the Chicago soy complex during the week ended Feb. 4, due to positive news that Wednesday.
Much of the market’s focus was on the upcoming USDA report, which is expected to show smaller U.S. corn and soybean crops after the agency sprung a surprise last month with a higher-than-anticipated forecast.
Now, warmer-than-normal weather across much of the Midwest farm belt was expected to accelerate the maturity of late-planted crops, reducing the risk that frost would damage yields.
“The weather forecast continues to show above-normal temperatures weather in the eight-to-14-day forecast. The beans would be the most susceptible to any frost in that time frame,” said Ted Seifried, chief market strategist with the Zaner Group.
Chicago Board of Trade November soybeans fell 5-1/2 cents to $8.66-1/2 a bushel (all figures US$). CBOT December corn shed 1-1/2 cents to $3.60 a bushel, while December wheat fell 4-3/4 cents to $4.77-1/2 a bushel.
The losses partly erased a rally on Tuesday, when hopes for renewed Chinese purchases of U.S. agricultural products lifted the market ahead of high-level trade talks next month aimed at ending a year-long trade war.
Steep tariffs imposed last year have slashed Chinese imports of U.S. goods. China announced a short list of tariff exemptions on Wednesday, but key farm products were not included.
“We had the optimism yesterday that China’s going to sweeten the deal by buying more agricultural products. But when they put out their tariff exemptions, beans, corn, ethanol and wheat were not on there,” Seifreid said.
Senior White House adviser Peter Navarro tamped down expectations on Tuesday for an early-round breakthrough in talks and urged investors, businesses and the public to be patient. On Wednesday, U.S. President Donald Trump called the China’s tariff exemptions a “good gesture.”
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.
