CHICAGO: US soybean futures fell 1.9 percent on Wednesday, dropping below $10 a bushel for the first time since April 4, on renewed fears about a trade dispute chilling demand from China, the world’s top buyer of the oilseed.
Wheat futures ticked higher on short-covering, recovering from a three-week low hit on Tuesday, while corn edged lower.
Chicago Board of Trade July soybean futures settled down 19 cents at $9.99-3/4 a bushel.
Traders were assessing the prospects for a resolution to a trade standoff between Washington and Beijing.
“We would like to see that we are going to have some renewed stability,” said Bill Gentry, a broker at Risk Management Commodities in Lafayette, Indiana. “Until we see the next really constructive transaction take place, we are just going to wonder.”
U.S. President Donald Trump said on Wednesday that “nothing has happened” with China’s ZTE Corp and that Beijing has “much to give” Washington on trade. U.S. lawmakers on Tuesday rejected any plan by Trump to ease restrictions on ZTE, calling the telecommunications company a security threat.
CBOT July soft red winter wheat settled up 3/4 cent higher at $4.94-1/4 a bushel.
A stretch of six negative sessions in seven days that slashed 8.7 percent of the value from the July soft red winter wheat contract attracted some bargain buyers.
“Chicago wheat is undervalued right now, when you look at the global supply outlook,” said Ole Houe, an analyst with brokerage IKON Commodities in Sydney. “We have issues with crops in the United States and Australia.”
Australian farmers are planting wheat in some of the driest soils in years, following on from a severe drought that cut 2017/18 output in the world’s fourth-largest exporter to the lowest in a decade.
CBOT July corn futures dropped 3 cents to $3.99-1/4 a bushel.
Declines in corn were kept in check by forecasts calling for showers in parts of the Midwest that may hamper the latter stages of planting.
“Traders wonder whether farmers will be able to plant all the corn they intended,” Farm Futures analyst Bryce Knorr said in a note to clients
Traders were also weighing up yield losses to Brazil’s safrinha, or second corn crop, due to drought against the potential benefit from a return of rain.
Source: Brecorder
