Chicago | Reuters — Chicago soybean and wheat futures took a nosedive on Thursday, retreating from multi-month highs, as signs of only limited Chinese purchases from the United States tempered optimism about fresh demand following a bilateral trade truce.
Corn eased, with the final stages of the U.S. harvest and favorable planting conditions in South America maintaining supply pressure.
Futures rose on Wednesday on news that China suspended retaliatory tariffs on U.S. imports, including duties on farm goods, although shipments of U.S. soybeans still face a 13 per cent tariff.
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But on Thursday, the market was still awaiting confirmation of soybean purchases while a Reuters report that China has booked two cargoes of U.S. wheat suggested a smaller volume than speculation of several hundred thousand tons.
“It’s about the ebb and flow of emotions regarding China,” said Arlan Suderman, chief commodities economist at StoneX.
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 ended down 26-3/4 cents at $11.07-1/2 a bushel, moving back from Wednesday’s 16-month peak of $11.37.
Caution over soybean demand was reinforced by a lack of any details from a soybean procurement signing ceremony on Thursday held in Shanghai.
U.S. officials have said the truce agreement includes a Chinese commitment to buy 12 million metric tons over November and December.
Talk of Chinese demand has also helped wheat pull away from a five-year low in October. But the market still faced pressure from accelerating exports from Russia, and competition from southern hemisphere exporters Argentina and Australia that are starting their harvests.
CBOT wheat Wv1 settled down 19-1/4 cents at $5.35-1/2 a bushel, retreating from a near four-month high of $5.55 on Wednesday.
CBOT corn Cv1 eased 6-1/2 cents to finish at $4.28-3/4 a bushel.
Traders are also beginning to focus on the USDA’s November supply and demand report, which the department plans to publish next week after skipping its October report due to the ongoing U.S. government shutdown.
— Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in London.
