U.S. grains: Soybeans slip on weather, Chinese buying concerns

CBOT November 2019 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago soybean futures fell on Wednesday as investors worried U.S.-China trade relations could escalate and as thoughts of frost impacting U.S. Midwest yields began to ease, traders said.

Soybean futures faced pressure after President Donald Trump criticized Chinese policy in his address at the United Nations on Tuesday, reviving worries that China’s recent buying spree of soybeans might dry up.

Nonetheless, the U.S. Department of Agriculture said private exporters sold 581,000 tonnes of U.S. soybeans to China for delivery in the 2019-20 marketing year that began on Sept. 1.

Corn was little changed as the market awaited a clearer picture of harvest yields. Investors instead turned their attention toward grain stocks data set to be published next Monday by the U.S. Department of Agriculture (USDA).

Chicago Board of Trade (CBOT) wheat also ticked lower for much of the day, as traders closely watched for news on a tender by Egypt for an update on international competition after large Northern Hemisphere harvests and brisk early-season sales by Black Sea exporters, such as Ukraine.

Traders said the results of the tender would help answer the question if competition for U.S. wheat exports remains stiff. The answer: yes.

Late in the session, Egypt’s state grains buyer, the General Authority for Supply Commodities, said it bought 300,000 tonnes of Russian and French wheat for shipment Oct. 26 through Nov. 5.

Meanwhile, Minneapolis spring wheat stayed firm with support from a rain-affected harvest in the northern United States.

The most-active soybean contract on the Chicago Board Of Trade ended the day down 0.64 per cent at $8.89-1/4 a bushel, while CBOT corn slipped 0.13 per cent to $3.74-1/4 a bushel (all figures US$).

CBOT wheat fell 0.83 per cent to $4.77-1/4 a bushel, but MGEX spring wheat futures rose 1.79 per cent to $5.54-1/4, surging to the highest price since June 28.

“Honestly, I thought I would come in this morning and see the market down a little more than it is because of all the impeachment talk” surrounding Trump, said commodities broker Craig Turner at Daniels Trading. “But the market doesn’t seem to care about that, either.”

House of Representatives Speaker Nancy Pelosi on Tuesday said the Democratic-led chamber was launching an official impeachment inquiry and directed six committees to proceed with investigations related to Trump’s Ukraine call.

Traders said they also shrugged off Trump’s remarks that a trade deal with China could happen sooner than people think.

China has made large purchases of U.S. soybeans this month in what was viewed as goodwill gestures to help discussions in the year-old trade dispute.

China has awarded new waivers to importers of U.S. soybeans free from tariffs imposed during the trade war, two sources familiar with the matter said on Tuesday, raising expectations of further purchases.

Reporting for Reuters by P.J. Huffstutter in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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