Chicago | Reuters –– U.S. soybean futures retreated on Tuesday on improving crop prospects and a lack of progress in trade talks with China, the world’s top importer of the oilseed, traders said.
Prices took a hit after soybeans climbed on Monday on short covering and hopes for easing tensions in the trade war between Washington and Beijing.
After the close of trading on Monday, the U.S. Department of Agriculture (USDA) increased its good-to-excellent rating for the nation’s soybean crop by two percentage points to 55 per cent, topping analysts’ estimates for 54 per cent. Ratings climbed by 10 percentage points to 50 per cent good to excellent in Illinois and by four percentage points to 48 per cent in Missouri.
USDA also raised its corn rating by one percentage point to 57 per cent, matching expectations.
Mostly favourable crop weather fuelled expectations that crop conditions may continue to improve.
“We’re thinking that maybe the bean crop is getting a little better,” said Ted Seifried, chief market strategist of the Zaner Group.
Chicago Board of Trade most-active soybeans dropped one per cent to $8.59-1/4 a bushel (all figures US$). Corn futures slipped 0.6 per cent to $3.66-1/4 a bushel, while wheat rose 0.5 per cent to $4.76-3/4 a bushel.
Traders and farmers remain uncertain about the size of the upcoming soybean and corn harvests after historic rains and flooding delayed plantings this spring.
Only 79 per cent of U.S. soybeans had set pods by Aug. 25, breaking the modern-era record for that date of 80 per cent, set in 1996, according to USDA.
Soybean traders are also watching the trade war because China is the world’s biggest importer of the oilseed. China bought $12 billion a year worth of U.S. soybeans prior to the dispute but slashed purchases as tensions escalated last year.
China’s foreign ministry reiterated on Tuesday that it had not heard of any recent telephone call between the United States and China on trade, after U.S. Treasury Secretary Steven Mnuchin said there had been contact between the two sides.
“The U.S.-China trade war has faded as a factor today with the market wanting to see evidence of more concrete progress rather than general comments from the leaders,” said Matt Ammermann, commodity risk manager with INTL FCStone.
Technical buying helped lift CBOT wheat futures, traders said, after the market fell to a three-month low last week.
Egypt, the world’s largest wheat buyer, said it had bought 350,000 tonnes of Russian, Ukrainian and French wheat in a tender. No U.S. wheat was offered.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.