Soybeans inch higher; dismal Chinese demand checks gains
Chicago soybean futures edged higher on Friday after closing largely unchanged in the last session, but gains were trimmed by lower-than-expected purchases by top buyer China. Corn is set for a second week of losses as the market remained under pressure from the U.S. harvest.
The Chicago Board of Trade most-active soybean contract gained 0.2% at $9.35-1/2 a bushel, as of 0302 GMT, with prices almost flat for the week. Corn rose 0.1% to $3.87-1/4 a bushel and wheat added 0.2% to $5.17 a bushel.
For the week, corn is set for a second week of losses while wheat is poised to end the week with its first decline in eight weeks. Private exporters reported the sale of 264,000 tonnes of U.S. soybeans to China for delivery in the 2019/20 marketing year, the U.S. Agriculture Department said on Thursday, amid hopes for a partial trade deal between the world’s two largest economies.
“They just bought a few boats but the market was expecting much higher purchases,” said one Singapore-based trader at an international trading company which supplies beans to China. Some purchases had been expected after Beijing this week offered to exempt importers from tariffs on U.S. shipments.
However, sales volumes remained lighter-than-anticipated since the White House announced a phase one deal that included a vow by Beijing to ramp up purchases to record highs. Thursday’s media report that China has agreed to buy a certain volume of U.S. farm goods provides only lukewarm assurance to the agriculture market, which has been waiting for a resurgence of U.S. exports to the East Asian country, Karen Braun, a market analyst for Reuters, wrote in a column.
“While the agreement suggests that trade tensions are easing and that a deal between the United States and China may finally be close to reality after nearly a year and a half, the proposed quantity is not as attractive as what may have been anticipated, and further purchases are contingent on the final deal.” Weekly soybean export sales data released by the USDA on Thursday was also below expectations. Net sales last week fell to a two-month low of 475,200 tonnes, including just one cargo of beans to China.
Analysts surveyed by Reuters ahead of the report had expected weekly sales of 800,000 tonnes or more. Corn export sales of about 582,900 tonnes last week were within the range of trade expectations, but sales this season remain well below normal due to stiff competition from lower-cost producers.
Wheat export sales fell to a near-four-month low of 262,400 tonnes. The International Grains Council on Thursday trimmed its forecast for global wheat production in the 2019/20 season as the outlook for Australia’s crop dimmed. In its monthly update, the inter-governmental body cut its global wheat production projection by 2 million tonnes to 762 million tonnes.
Grains prices at 0302 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 517.00 1.00 +0.19% -0.72% 499.53 56 CBOT corn 387.25 0.50 +0.13% -0.13% 384.18 47 CBOT soy 935.50 2.25 +0.24% +0.19% 914.33 65 CBOT rice 11.99 $0.00 +0.00% +2.48% $11.98 38 WTI crude 55.92 -$0.31 -0.55% -0.09% $55.21 Currencies Euro/dlr $1.110 $0.000 -0.01% -0.23% USD/AUD 0.6815 0.000 -0.03% -0.55%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
(Reporting by Naveen Thukral; Editing by Rashmi Aich)