U.S. grains: Soybeans sag on fears of fading export prospects

Chicago | Reuters — U.S. soybean futures fell about two per cent and neared a four-week low on Monday on chart-based selling and worries about export prospects for U.S. supplies amid a trade war with China, traders said.

Corn futures followed soybeans lower. But wheat futures rose on fears that Russian-Ukrainian tensions could inhibit grain exports out of the Black Sea region.

Chicago Board of Trade January soybean futures settled down 18-3/4 cents at $8.62-1/4 per bushel after dipping to $8.57, the contract’s lowest since Nov. 1 (all figures US$). December corn ended down three cents at $3.56 a bushel after hitting $3.55-1/4, its lowest since Sept. 28.

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CBOT December wheat finished up 7-3/4 cents at $5.07-1/2 a bushel.

The soybean sell-off accelerated as the benchmark January contract fell below its 50-day moving average near $8.72.

Soybeans were pressured by fears of a prolonged trade war between the U.S. and China, by far the world’s largest soybean importer. China has been buying Brazilian soybeans during the conflict and may be able to continue avoiding U.S. soy, given expectations of an early harvest in South America.

“The window for U.S. soy exports to China is pretty much closed,” said Terry Reilly, senior analyst with Futures International.

U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet on the sidelines of a G20 summit in Argentina this week, and Washington is set to raise tariffs on $200 billion worth of Chinese imports to 25 per cent from 10 per cent in January if there is no agreement.

“Traders are growing skeptical that we will see meaningful progress toward a trade deal with China when President Trump and President Xi have dinner on Friday,” INTL FCStone chief commodities economist Arlan Suderman wrote in a client note.

Wheat futures rose as news of a U.S. wheat sale to Egypt and geopolitical tension in the Black Sea region sparked a round of short-covering.

“Tensions between Russia and Ukraine during the weekend could have an impact on the level of loadings from Mariupol port as facilities are currently subject to increased controls,” French consultancy Agritel also said.

Mariupol is a grain export hub on the Sea of Azov, an arm of the Black Sea. The area has been at the centre of a crisis between Russia and Ukraine, which began on Sunday after Moscow seized three Ukrainian naval ships and took their crew prisoner.

Meanwhile, Egypt’s state grain buyer last week said it bought 240,000 tonnes of wheat in a tender on Thursday, with half coming from the U.S. And the U.S. Department of Agriculture on Monday confirmed a private sale of 120,000 tonnes of U.S. soft red winter wheat to Egypt.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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