GRAINS-U.S. wheat falls 1%, strong demand caps losses; soybeans ease
Chicago wheat futures slid more than 1% on Tuesday, giving up some of the last session’s strong gains, although losses were limited by a jump in demand for grains amid the coronavirus pandemic.
Soybeans lost ground for the first time in six sessions. Corn dropped for a third consecutive day on expectations of lower ethanol fuel demand as global oil prices weaken.
“There is a bit of panic buying in agriculture commodities and volatility across the global markets,” said Phin Ziebell, agribusiness economist at National Australia Bank.
“The important thing to note is that the world is well supplied with wheat but logistics could be another issue.”
The most-active wheat contract on the Chicago Board Of Trade (CBOT) lost 1.1% to $5.56-1/2 a bushel by 0318 GMT. The contract closed up 4.3% on Monday, when prices hit their highest since Feb. 21 at $5.63-1/4.
Soybeans were down 0.2% at $8.82 a bushel, having firmed 2.5% on Monday and corn fell 0.4% to $3.42 a bushel.
Wheat rallied on Monday as U.S. flour millers increased purchases amid stockpiling of staples like bread by consumers, and on signs of a pick-up in global export business.
Chinese importers last week signed deals to buy 340,000 tonnes of U.S. hard red winter wheat, their first purchase of the grain since late 2017.
Russia has suspended exports of processed grains such as ready-to-eat buckwheat, rice or oat flakes from March 20 for 10 days, a letter sent by the country’s agriculture safety watchdog to its regional offices showed on Monday.
The spread of the coronavirus in South America has also stoked worries about shipments of soybean products. Argentina is the world’s top soymeal supplier and Brazil is the biggest global soybean exporter.
Agricultural commodity merchant Louis Dreyfus Company (LDC) expects food demand to hold up during a coronavirus epidemic as consumption focuses on staples and buyers stockpile around the world, its chief executive said.
Commodity funds were net buyers of CBOT wheat, soybean, soymeal and soyoil futures contracts on Monday and net sellers of corn, traders said.
Source: Reuters (Reporting by Naveen Thukral; Editing by Aditya Soni)