U.S. grains: Soy, wheat extend losing streaks

CBOT March 2020 wheat with five-, 20- and 50-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures fell on Tuesday for the sixth day in a row, with investors waiting for signs of the pickup in Chinese demand promised when Washington and Beijing signed the Phase One trade deal on Jan. 15, traders said.

Wheat futures also drifted lower, their third straight day of losses, while corn firmed on support from signs of rising export prospects.

Concerns about the spread of a coronavirus in China continued to hang over the market, a day after fears of the disease denting the global economy pressed commodity futures sharply lower.

“Until official Chinese authorities confirm that the virus has been brought under control, the prospect of consumer reticence in China — a very important consumer of many agricultural products — is likely to weigh on prices on the markets,” Germany’s Commerzbank said.

President Xi Jinping said on Tuesday that China was sure of defeating a “devil” coronavirus that has killed 106 people, but international alarm was rising as the outbreak spread across the world.

Chicago Board of Trade March corn futures settled up six cents at $3.86-1/2 a bushel (all figures US$).

Private exporters reported the sale of 124,335 tonnes of U.S. corn to Mexico for delivery in the 2019-20 marketing year, the U.S. Agriculture Department said. It was the sixth flash sale of corn since Jan. 23.

“Fundamentally, I think corn has found some world buyers and found some support and is recovering on demand,” said Chuck Shelby, CEO at Risk Management Commodities, a brokerage in Lafayette, Indiana.

CBOT March soybean futures were down 2-1/4 cents at $8.95 a bushel and CBOT March wheat was 2-1/2 cents lower at $5.69-3/4 a bushel.

“A depressing factor, especially for soybeans, is the lack of evidence that China has resumed larger-scale purchases of U.S. supplies,” said Matt Ammermann, commodity risk manager with INTL FCStone. “The deal was signed and everything went quiet. Harvesting of Brazil’s soybean crop has started and the harvest is expected to be large.”

Losses in wheat and soybeans were limited by technical buying at session lows.

Soybeans found support 1/4 cent above Monday’s low of $8.88-1/4 a bushel, which was the lowest level for the most-active contract on a continuous basis since Dec. 12.

The 20-day moving average was noted as a key support point for the March soft red winter wheat contract, with resistance noted at the five-day moving average.

— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.


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