Chicago | Reuters — U.S. soybean futures fell on Wednesday due to waning demand for U.S. supplies from China, the world’s top buyer of the oilseed, traders said.
Wheat and corn futures reversed earlier gains to close lower on a bout of technical selling.
Private exporters reported the cancellation of 270,000 tonnes of U.S. soybeans previously sold to China for delivery during the 2013-14 crop year, the U.S. Agriculture Department said.
The move shows that China was likely to begin ramping up purchases of newly harvested soybeans from South American producers Argentina and Brazil as supplies begin arriving at ports.
“Soybeans had a couple of cancellations from China,” said Tom Grisafi, president of agricultural advisory service Trade The Farm LLC. “They are playing this little game. It wasn’t that much but enough to catch the longs the wrong way.”
Exporters also reported that China bought 240,000 tonnes of U.S. soybeans for delivery during the next marketing year, which mitigated the pressure on the futures market.
But forecasts for crop-boosting rains for areas of Brazil where corn and soybeans have been stressed by hot and dry conditions kept a bearish tone over the market.
Chicago Board of Trade soybeans for March delivery ended down 11-3/4 cents at $13.23 a bushel, closing near session lows (all figures US$). Prices stayed above weekly lows hit on Tuesday, which traders said was because the Chinese cancellations had been anticipated.
CBOT March soft red winter wheat fell 3-1/4 cents to $5.87 a bushel. The benchmark contract rose early but ran into resistance at its 50-day moving average, a key technical point the market has not passed through since Nov. 4.
Forecasts for rising temperatures, which will remove the threat of winterkill for crops in the U.S. Plains and Midwest, weighed on the market while signs of export demand limited the declines.
Japan’s ministry of agriculture offered on Wednesday to buy a total of 286,091 tonnes of food quality wheat from the U.S., Australia and Canada in a regular tender which will close on Friday.
Analysts were expecting a U.S. Agriculture Department report on Thursday morning to show weekly export sales of wheat were in a range from 450,000 to 750,000 tonnes.
Chicago Board of Trade March corn was 1-1/2 cents lower at $4.40 a bushel, just 3/4 cent above its session low.
Spillover pressure from the weakness in the soybean market added further pressure to corn.
“Right now, this market needs big-time enthusiasm to keep it going,” said Jerry Gidel, chief feed grain analyst at Rice Dairy. “With these markets, it is ‘What have you done for me lately?'”
— Mark Weinraub is a Reuters correspondent covering grain futures markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore.