U.S. grains: Soybeans sink on liquidation ahead of USDA report

(Keith Weller photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybeans extended losses on Tuesday to touch a one-week low on long liquidation and technical selling ahead of a monthly government supply and demand report, more than offsetting strong import demand from China.

Corn ticked up, recovering slightly from Monday’s slide of more than two per cent as traders unwound long-soybean and short-corn spreads and awaited direction from Wednesday’s updated forecasts from the U.S. Department of Agriculture.

Wheat fell for the eighth time in 10 sessions, pressured by tepid demand for U.S. supplies and improving crop conditions in the U.S. and the Black Sea region.

Chicago Board of Trade January soybeans fell 5-1/2 cents, or 0.6 per cent, to $8.76-3/4 a bushel, with selling pressure noted as the contract fell below its 50-day moving average around $8.82-1/2 (all figures US$).

CBOT March corn rose 1/2 cent to $3.73-1/2 a bushel while March wheat fell 1-1/4 cents, or 0.3 per cent, to $4.81-1/2 a bushel.

Unwinding of spreads involving long soybean positions and short corn positions weighed down soybean prices and helped to underpin corn. March soybeans’ premium to March corn hit a 7-1/2-week high of around $5.26-1/2 late last week before narrowing this week.

“The spreads have been favorable to the soybeans against the feed grains for the most part this month so we’re seeing some liquidation today,” said Mike Zuzolo, president of Global Commodity Analytics.

Soybean traders shrugged off news of strong imports by China last month as U.S. sales are likely to face increased competition from Argentine supplies as farmers there react to a weak peso versus the greenback by selling dollar-priced soybeans in the international market.

China imported 7.39 million tonnes of soybeans in November, up a third from 5.53 million tonnes in October, figures from the General Administration of Customs of China showed.

Wheat prices were weighed down by improving crop conditions in major exporter Ukraine after a drought-hit start to the growing season.

Grain and oilseed markets are turning their attention to the USDA’s monthly crop data, due at noon ET on Wednesday.

The agency is expected to cut its soy supply forecast while boosting its corn and wheat supply outlook, a Reuters poll of analysts showed.

Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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