Chicago | Reuters — U.S. wheat futures fell 1.4 per cent on Wednesday on a round of follow-through selling after Tuesday’s technical setback, traders said.
The weakness in wheat spilled over to the corn market, which also faced some profit-taking after a higher opening during the overnight trading session.
Soybean futures fell for the seventh day in a row, with weak export demand restricting any attempts at a rally. Bargain hunters kept the losses in check, however.
“The market is still awaiting signs of an increase in Chinese demand as promised in the signing of the Phase One trade deal,” brokerage Allendale Inc. said in a note to clients.
Worries about export demand also weighed on wheat due to concerns that the most-active Chicago Board of Trade (CBOT) soft red winter wheat contract’s recent rally to its highest since August 2018 made U.S. offerings too pricey for overseas buyers who had ample options from competing countries.
CBOT March soft red winter wheat settled down 7-1/2 cents at $5.62-1/4 a bushel (all figures US$). It was the most-active contract’s biggest percentage drop in six weeks.
The contract held technical support at its 30-day moving average, a level it has not dipped below since Dec. 12.
CBOT March corn ended 2-1/4 cents lower at $3.84-1/4 a bushel and CBOT March soybeans dropped two cents at $8.93 a bushel.
U.S. Agriculture Secretary Sonny Perdue said on Wednesday he does not know whether China’s coronavirus outbreak will affect Beijing’s pledge to radically increase purchases of U.S. farm goods under the Phase One deal signed on Jan. 15.
The virus has added to doubts about Chinese demand after an absence of fresh purchases in the wake of the deal.
“The coronavirus story became a black swan event that overshadowed that emerging optimism, leading fund managers to again short the commodity sector until more is known about its impact on global demand,” Arlan Suderman, chief commodities economist at INTL FCStone, said in a research note to clients.
The death toll from the virus outbreak rose to 132 on Wednesday, with nearly 1,500 new cases.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.