Soybean falls for 3rd day on S.American supply pressure; wheat firms

Chicago soybean futures slid for a third consecutive session on Wednesday on pressure from abundant world supplies, with a bumper South American crop hitting the market. Wheat ticked higher after closing little changed on Tuesday, while corn was flat.

Agricultural markets are awaiting news from ongoing U.S. trade negotiations with China, the world’s top soybean importer. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to travel to China next week for another round of trade talks with Chinese Vice Premier Liu He, a Trump administration official said on Tuesday.

The resumption in face-to-face talks, the first since President Donald Trump delayed a March 1 deadline to raise tariffs on $200 billion worth of Chinese imports, marks an acceleration of the negotiations aimed at ending an eight-month trade war between the world’s two largest economies.

“There is plenty of soybean supply around the world and we have yet to see China resume buying,” said one Singapore-based trader. The most-active soybean contract on the Chicago Board Of Trade was down 0.1 percent at $9.02-3/4 a bushel by 0706 GMT, having closed down 0.2 percent on Tuesday.

Wheat added 0.1 percent to $4.57 a bushel and corn unchanged at $3.71-1/4 a bushel. May soybeans may stabilize above a support at $8.98-3/4, and then retest a resistance at $9.11 per bushel, Wang Tao, Reuters market analyst for commodities and energy technicals, wrote in a report.

There is additional pressure on the soybean market following the spread of African Swine Fever in several parts of China which has curbed demand for protein-rich animal feed ingredient soymeal.

The fever has spread to neighbouring Vietnam and the United Nations Food and Agriculture Organization on Tuesday advised the country to declare it as a national emergency. Still, large speculators hold sizable net short positions in grains and soybeans, leaving the markets vulnerable to short-covering rallies – especially as the U.S. spring planting season approaches, with the risks of planting delays.

Farmers in Nebraska, the No. 3 U.S. corn state, are struggling with historic flooding, although planting is still a few weeks away.

The use of corn in animal feed in Japan, one of the world’s biggest importers of the grain, rose to 48.8 percent in January, compared with 47.9 percent in the same month of 2018, preliminary data from the Ministry of Agriculture, Forestry and Fisheries showed on Wednesday. Commodity funds were net sellers of CBOT corn, wheat, soybean and soyoil futures contracts on Tuesday and net buyers of soymeal futures, traders said.

Grains prices at 0706 GMT

 Contract    Last    Change  Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  457.00  0.50    +0.11%   -1.14%       479.74  54
 CBOT corn   371.25  0.00    +0.00%   -0.54%       376.64  64
 CBOT soy    902.75  -1.25   -0.14%   -0.71%       914.38  57
 CBOT rice   10.83   $0.05   +0.46%   +0.98%       $10.57  71
 WTI crude   59.07   $0.04   +0.07%   -0.03%       $56.18  
 Currencies                                                
 Euro/dlr    $1.135  $0.001  +0.08%   +0.18%               
 USD/AUD     0.7079  -0.002  -0.32%   -0.11%

Source: Reuters (Reporting by Naveen Thukral; Editing by Rashmi Aich)