Soybeans, corn under pressure from dismal demand, strong dollar
Chicago soybean futures slid on Thursday, while corn was largely unchanged, as a lack of demand for both commodities amid bumper global supplies weighed on prices.
Wheat lost more ground, falling for a second straight session.
“Demand for corn and soybeans is not picking up at a time when the global supply picture is improving,” said one Singapore-based trader. “A stronger dollar is further hitting U.S. grain exports.”
The most-active soybean contract on the Chicago Board of Trade (CBOT) lost 0.2% to $13.22 a bushel, as of 0226 GMT, while corn was unmoved at $5.87-1/4 a bushel.
Wheat gave up 0.1% to $6.05-1/2 a bushel, having lost 2.6% on Wednesday.
The dollar hit a two-month high against a basket of peers on Wednesday, bolstered by recent signs of a resilient U.S. economy, while unease over U.S. debt ceiling talks kept investors moving to safe havens.
A stronger dollar makes the greenback-priced U.S. commodities more expensive for buyers holding other currencies.
Dismal demand for corn and soybeans from top importer China is providing headwinds to prices.
A surplus of cheap wheat in China is replacing significant volumes of corn in its huge animal feed market, say feed makers and analysts, curbing consumption of both corn and soymeal and potentially reducing demand for imports.
Ukraine accused Russia of effectively cutting the Ukrainian port of Pivdennyi out of a deal allowing safe Black Sea grain exports of food and fertiliser from Ukrainian ports of Odesa, Chornomorsk and Pivdennyi. Russia complained it had been unable to export ammonia via a pipeline to Pivdennyi.
Export prices of Russian wheat fell again last week as the world market eased due to good supply and an extension of the Black Sea grain deal, as well as local expectations of a cut in export duty, analysts said.
The Buenos Aires grains exchange said on Wednesday intense rains in recent days in Argentina’s key agricultural farmland has improved expectations for the 2023/2024 wheat crop, after a historic drought badly crimped yields.
Rainfall is critical for Argentine farmers to start planting wheat, with sowing set to begin in the coming days. The total crop is estimated at 18 million tonnes, up from the 12.4 million tonnes harvested in the previous season.
Commodity funds were net sellers of CBOT wheat, soybean and soymeal futures contracts on Wednesday, traders said. They were net buyers of CBOT corn and soyoil contracts. Source: Reuters (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)