U.S. grains: Soybeans dip as Huawei arrest clouds trade detente

The arrest in Vancouver of Huawei chief financial officer Meng Wanzhou, shown here with Russian President Vladimir Putin at an investment forum in Moscow in October 2014, has further dampened hopes of revived commodity flows between the U.S. and China. (File photo: Reuters/Alexander Bibik)

Chicago | Reuters — U.S. soybean futures fell for the first time in five sessions on Thursday as the arrest of a senior executive at China’s Huawei Technologies Co. stoked concerns about a U.S.-China trade truce that has yet to produce a resumption of U.S. soybean sales to China.

Corn followed soybeans lower, although declines were largely offset by solid export demand. Wheat was pressured by muted export demand as rival suppliers such as Russia continue to challenge U.S. grain in global markets.

World stock markets fell as the arrest by Canadian authorities of Huawei’s chief financial officer, Meng Wanzhou, who is also the daughter of the company’s founder, for extradition to the U.S. stoked fears of renewed tensions between Washington and Beijing.

The arrest further dampened hopes of a revival in commodity flows between the two countries after last weekend’s 90-day truce period agreed by U.S. President Donald Trump and Chinese counterpart Xi Jinping.

“There’s a lot of speculation and uncertainty about whether an actual trade deal will get done. Relations definitely worsened a little bit today,” said Terry Reilly, senior commodities analyst with Futures International.

“With all these unanswered questions, people are returning back to fundamentals and we’ve got some large stocks out there. You can’t deny that,” he said.

Forecasts of a record soybean harvest in Brazil generated additional headwinds for futures as bumper supplies from the South American agricultural powerhouse could reduce China’s need to buy from a massive U.S. harvest.

No. 3 soybean exporter Argentina could see its exports of the oilseed jump to a record 14 million tonnes this season, the Rosario Grains Exchange forecast.

Chicago Board of Trade January soybeans were down four cents at $9.09-1/2 a bushel, moving away from a near six-month high struck on Monday (all figures US$).

CBOT March corn fell 1-1/2 cents to $3.82-3/4 a bushel.

The U.S. Department of Agriculture confirmed private corn sales to Mexico totaling nearly 200,000 tonnes on Thursday.

Wheat futures remained under pressure from sluggish demand for U.S. shipments. CBOT March wheat fell 2-1/2 cents to $5.15-1/2 a bushel.

No U.S. wheat was offered in the latest international tender by Egypt’s GASC. The group bought 350,000 tonnes of Russian and Ukrainian wheat in the tender.

Traders have reported delays in the issuing of letters of credit for 16 previously purchased cargoes, including one of U.S. wheat, although Egypt’s supply ministry said the payment guarantees were being issued.

Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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