Chicago | Reuters — U.S. soybean futures dropped to two-week lows on Wednesday as renewed export sales to China following a trade war truce between Washington and Beijing fell short of expectations.
Corn futures also declined on a slowdown in production of corn-based ethanol, while wheat dropped nearly two per cent in light trading, pressured by technical selling and easing world prices.
The U.S. Department of Agriculture confirmed about 1.2 million tonnes in new U.S. soybean sales to China in the second wave of buying since U.S. President Donald Trump and Chinese President Xi Jinping agreed to a 90-day tariff detente earlier this month.
The world’s top soybean importer, which halted nearly all purchases of U.S. soy six months ago amid increased trade tensions, bought more than 1.5 million tonnes last week.
“The market is not impressed with these sales,” said Rich Nelson, chief strategist with Allendale Inc. “Even with almost three million tonnes of new sales in the past few days, they’re disappointed that this is not five or eight million.”
Chicago Board of Trade (CBOT) January soybeans fell 7-3/4 cents to $9 a bushel, briefly dropping below the key $9 mark for the first time in two weeks (all figures US$). March soybeans were down 7-3/4 cents at $9.13. Both held chart support at their 20-day moving averages.
The market remains anchored by the looming South American harvest and the narrowing window of opportunity for U.S. exports. Farmers in Brazil, the world’s top soybean exporter, have started harvesting their next crop, which is projected to be the largest on record.
Corn futures drifted lower on concerns about demand from the ethanol industry, but prices remained locked in a recent trading range.
CBOT March corn fell 3-3/4 cents to $3.81-3/4 a bushel.
Some ethanol makers have slowed output because of poor profit, threatening corn demand from an industry that consumes about a third of the U.S. harvest. U.S. Energy Information Administration data showed output at an average of 1.046 million barrels per day last week, unchanged from the previous week.
CBOT March wheat dropped 10-1/4 cents to $5.22-1/2 a bushel in the contract’s steepest drop in nearly two months. The contract broke through chart support at its 50-day moving average and closed near that level.
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.