U.S. grains: Corn, soybeans sink to 1-1/2 week lows

Chicago | Reuters — U.S. corn and soybean futures drifted lower on Thursday ahead of a key U.S. government report due on Friday expected to raise estimates of U.S. 2018 corn and soybean plantings.

Wheat also eased, pressured by an accelerating U.S. winter crop harvest and reports of higher-than-expected yields in some areas.

Favourable crop weather around the U.S. farm belt weighed on grain markets in general, although declines were limited at times by bullish weekly export sales data from the U.S. Department of Agriculture that suggested demand has grown following recent price declines.

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Chicago Board of Trade August soybeans fell 6-1/4 cents to $8.66-3/4 a bushel after earlier touching a 1-1/2 week low (all figures US$). New-crop November soybeans fell 5-1/2 cents to $8.83-1/2 a bushel.

CBOT September corn ended down 7-1/2 cents at $3.54-1/4 a bushel, a 1-1/2 week low, and new-crop December dropped 7-1/4 cents to $3.66.

CBOT September wheat declined five cents, to $4.83-1/2 a bushel.

USDA on Thursday reported soybean export sales last week at 358,500 tonnes, in line with trade estimates, and new-crop sales at 642,300 tonnes, above expectations. China cancelled 120,000 tonnes of purchases, but sales to atypical buyers were large.

U.S. soybean prices have come under pressure from higher import tariffs by top buyer China set to take effect on July 6 amid a trade fight with Washington. Meanwhile, Brazilian soy prices have soared.

“The market doesn’t like to see China switching out of U.S. exports, but sales are going to countries we don’t normally do business with,” said Ted Seifried, analyst with Zaner Ag Hedge.

“Global end-users are looking at the $1-plus (per bushel) discount of U.S. soybeans versus Brazil and figuring this is not a bad time to get some beans on the books,” he said.

Corn and wheat export sales were at or above trade expectations.

Agricultural markets are bracing for USDA’s acreage and quarterly stocks reports on Friday.

Analysts on average expect USDA to raise the estimate of U.S. corn and soybean plantings from its March forecast, and to report multi-year highs in U.S. June 1 corn and soy stockpiles.

“Corn and soybean prices are under pressure ahead of tomorrow’s figures for U.S. stocks and planted acreage,” Commerzbank said in a note.

“Looking at the average estimates, June stocks of corn are likely to be the highest since 1988, while June stocks of soybeans are even expected to set a new record.”

— Karl Plume reports on agriculture and commodities for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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