Chicago | Reuters — Chicago Board of Trade (CBOT) corn and soybean futures fell sharply on Tuesday on concerns that commodity purchases from China will slow as that country’s economy softens, traders said.
Wheat futures edged higher despite worries about the viability of U.S. exports as investment funds covered short positions following a decline to the lowest levels in nearly four months on Monday.
Soybeans snapped a three-session winning streak. The selloff was sparked by a report that showed that China’s manufacturing sector contracted at its fastest pace in three years during August.
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Chicago Board of Trade soybean futures hit their highest level in more than a week on Thursday as technical buying helped the market recover from a three-month low reached on Monday, analysts said.
“You can see the writing on the wall that eventually export demand (from China) will get a little bit weaker,” said Mark Schultz, chief analyst with Northstar Commodity Investment Co.
China is the world’s largest importer of soybeans, making the oilseed market sensitive to macroeconomic sentiment about the world’s No. 2 economy.
CBOT November soybeans settled down 13-1/2 cents at $8.74 a bushel (all figures US$). CBOT December corn dropped 6-1/4 cents to $3.69 a bushel.
Soybean prices also were curbed by a U.S. Department of Agriculture crop progress report, released after the market close on Monday, which pegged 63 per cent of the soybean crop at good to excellent, unchanged from last week and contrary to market expectations of a slight decline.
The early phases of the U.S. harvest added pressure to the corn market.
CBOT December soft red winter wheat settled up 1-1/4 cents at $4.86-1/4 a bushel. Traders noted some long wheat/short corn spreading that lent support to wheat.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.
