U.S. grains: Soy slips on favourable weather, demand disappointment

Chicago | Reuters — U.S. soybean futures eased on Wednesday on mild weather across the U.S. Midwest that lessened risks that crop-damaging frost could hurt the late-planted crop and on worries that a recent wave of Chinese soy purchases has ended.

Corn futures edged higher in a mild short-covering bounce, while wheat gained on robust demand around the world and fears that dry weather could dent yield prospects for crops in the Southern Hemisphere.

Price moves were more measured than earlier in the week, when turbulent energy markets following an attack on Saudi Arabian oil facilities riled grains.

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The market’s focus remained on unseasonably warm U.S. Midwest weather that has helped accelerate crop maturity in corn and soybeans and worrisome dryness in South America, where farmers in Argentina and Brazil are preparing to plant their next crops.

Chicago Board of Trade November soybeans fell five cents to settle at $8.88-3/4 a bushel, while December corn rose 3-1/4 cents to $3.71-1/4 a bushel (all figures US$).

CBOT December wheat notched a one-month high and ended up 5-1/4 cents at $4.92-1/4 a bushel. Buying accelerated as the contract broke through technical chart resistance at its 50-day moving average.

Investors are awaiting fresh export sales data due to be released by the U.S. Department of Agriculture (USDA) early on Thursday.

Analysts surveyed by Reuters expected wheat and soybean sales to be down from the prior week’s robust pace, while corn sales were seen rising following a drop in prices.

USDA did not report any fresh U.S. soybean sales to China on Wednesday after three days of daily sales announcements confirming a total of 720,000 tonnes sold to the top importer.

China returned to the U.S. market last week as U.S.-China trade tensions eased ahead of talks aimed at ending a trade war that has slashed demand for U.S. farm products, particularly soybeans. Despite the recent buying, China’s soy purchases remain well below normal levels.

“We’ve filled last week’s call for soybean buying by China. But the real question now is whether China is going to buy any more after this point,” said Rich Nelson, chief strategist with Allendale Inc.

Wheat prices were supported by a string of purchases by importing countries, including Algeria, Turkey and top buyer Egypt. Although rival exporters have captured the bulk of the recent demand, the buying has helped whittle down hefty global supplies.

— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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